4 Must-Knows for Becoming a House Flipper

House flipping has the potential to make you big bucks. Many entrepreneurs have turned this art into a lucrative career, but too many would-be flippers lost their life savings by not having the knowledge and skills it takes to do it successfully. If you're considering house flipping for an income or a supplemental income, here's what you need to know to come out a winner.

Repair Savvy

Repair Savvy Image via Flickr by grongar The ability to complete all or most of the necessary repairs and renovations yourself means you can take on even the most challenging fixer-upper and make a profit with it. Even if you plan to hire contractors, you need enough knowledge so that you're not at the mercy of whatever they tell you. A basic understanding of structures, building codes, electrical wiring, plumbing, and roofs helps you choose houses worth the effort, and avoid those that are going to be too expensive to repair to make a profit. You'll also need to understand what your contractors tell you to make sound decisions on what repairs and renovations are worth your investment. Know when you need to invest in a termite treatment at Orkin.com to protect your investment from the various insect threats.

Knowledge of the Area

The best investments are in good school districts, near shopping facilities, and away from noisy freeways and railroad crossings. Knowing the area where you flip houses means you can grab the ones people are going to want to buy and avoid those that will be too hard to resell due to poor school districts, noise, nearby landfills, and other problems. If you aren't intimately familiar with the area, you'll need to do lots of research before investing there. Read the newspapers for zoning issues, property tax rates, water quality, issues with local school systems and other issues buyers will be interested in. Cutting corners here might mean it takes so long to flip the house you lose all your profits.

An Eye for Value

Unlike building skills and area knowledge, an eye for value isn't a learned skill. But you'll need a feel for which homes hold flipping potential and which ones are money pits in order to succeed. Unsure if you've got what it takes? Try a small flip first, investing a minimal amount on a house that won't break you up financially if the flip isn't successful. If your first try goes well, up the ante on your second house purchase. Don't go all in until you're comfortable with your skills at eyeing value.

Make Sure Time is On Your Side

Some investors underestimate the time involved in finding good buys, researching the area and the house, completing repairs and renovations, and selling the home in this uncertain housing market. It's a big job, and even the most experienced house flippers get stressed out and fatigued at times. Make sure you have the hours to spend on these tasks before getting into house flipping. The upside is, flipping is sort of addictive. Once you get into it, flipping may be the only thing you want to do. Think you've got what it takes to be successful at flipping houses? Give it a shot! If you've got the know-how it's an interesting and exciting way to make money. [smartads]

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