Last Updated on November 23, 2022 by Tabraiz
The pandemic left a lot of people stuck at home with a lot of time on their hands. For those who had thought about launching a business, it became an opportunity to get serious about it. That helps explain the sharp rise in entrepreneurship in the US and abroad.
While the tech-savvy looked to the internet, it’s not the right fit for everyone. Others looked at options that fit with their skills. If you’re good at DIY home renovations, you likely considered house flipping. If so, keep reading for our guide to house flipping for beginners.
For most people new to house flipping, you work with a tight budget. That means you need to target the right neighborhoods.
Avoid high-end and low-income areas, at first. The former costs too much and the latter often comes with extra hassles, like the potential for vandalism.
Working-class neighborhoods are often ideal because the prices are reasonable. There is also a good chance you can make small repairs that will improve home value without breaking the bank.
Get the Financing in Place
Once you know the neighborhood you’re looking at, you can get a pretty solid idea of what it’s going to cost to buy a house there. Use that information to get a lender in place with a pre-approved loan.
Getting funding does require a decent credit score. Think in the 650 range. Some lenders will go a little lower but expect higher interest rates.
Picking a House
Ever hear that advice about the stock market to buy low, sell high. The same applies to how to flip a house. You want a home that’s undervalued, so you can sell the house for a bigger profit margin later.
Keep an eye out for foreclosures and bank short sales. You can also network with realtors, contractors, and even do your own marketing campaigns to find homes for sale.
For beginners, sweat equity is often the golden ticket to making a serious go of house flipping. Everything you can do yourself in a reasonably short period of time is something you don’t pay labor costs on. Most locales let you make any cosmetic changes you want, but structural changes like taking out a wall require a permit in most places.
Unless you already have a buyer in place, you’ll want to work with a realtor listing rehabbed homes for sale. Realtors can help you with pricing and marketing. Plus, they’ll show the place to potential buyers, which lets you avoid that task.
House Flipping for Beginners Takes Planning
As you start your adventure in house flipping for beginners, make sure you do the necessary planning. Research the neighborhoods and your financing options. Plan out what kind of DIY home renovations you can handle and how long they’ll take you.
Find a local realtor that you like to help you sell the house once it’s finished. While you might hate the fees, it’ll save you a lot of time and hassle in the end.
Looking for more tips on entrepreneurship? Check out the posts in our Business category.
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