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How to Flip Houses – Five Steps to Success

How to Flip Houses - Five Steps to Success

http://www.biggerpockets.com/flippingbook Have you always wanted to flip houses but don’t know how to get started? Let this video be your introduction into the world of house flipping by sharing the 5 steps you need to follow in order to find success as a house flipper.

Transcription:

Hey this is Brandon with Biggerpockets.com and today I’m going to show you how you can flip houses in 5 easy steps for fun and for profit.
Alright! So you want to start flipping houses.
I don’t blame you.
Flipping houses can be fun, exciting, and inspirational, and very dangerous if you don’t do it right. I really don’t want you to crash and burn with your real estate flipping. So let me show you the five steps that I follow when I flip a house.
Step # 1: Plan
What kind of house are you going to flip? Where are you going flip at? And, how are you exactly going to complete it?
These are all really important questions that you need to answer for yourself before you start house shopping.
You need to determine where people in your community are buying houses and start there. Also, what kind of properties are people buying? Three bedrooms? Big garage? Basement?
Until you answer these questions and formulate a plan don’t jump into a house flip.
Step # 2: Get your Financing Figured out
How are you going to pay for this flip?
Because, most bands don’t like funding flips, so, if you don’t have the cash you may need to get creative.
One of the common methods used to fund a flip is the hard money lender. And if you plan on using the hard money lender, you better start looking for them right now and talking with them, building that relationship.
If you don’t know any hard lenders in your area, you can find them for free in your state by visiting biggerpockets hard money lender directory by clicking this link right here or you could watch a video I made on how to find a hard money lender by clicking this link right here.
Alright let’s move on to step # 3: Buy smart
When it comes the time to buy a property not any old property is going to cut it. You’ve got to buy smart. An easy tool to use is called the 70 percent rule. And basically, it goes like this:
First, figure out how much the house will actually sell for once it all fixed up. You might want to talk to a realtor for this. Multiply the number by 70 percent. So, track out your repairs, and badabing badaboom you got an estimate on the price you can pay.
So take some time and actually do the numbers and make sure it works. And be conservative in your estimates. If you think it would sell between 140 and 160, go with 130 and then double your repair cost and then double your timeline. Trust me.
If you want real comfortable and knowing exactly how much it cost to fix up a property then make sure you pick up a copy of biggerpockets presents the book on estimated rehab cost, which comes free when you buy the bigger pockets presents the book on flipping houses — also an amazing book. If you want a copy click on the little book icon right here.
Alright moving on, Step # 4: It’s time to step remodeling the home
If you plan to do all the work yourself (and I don’t recommend it) you better get started. But instead you probably are going to higher some contractors.
Get to really make sure that the contracts are licensed, bonded, and insured. And you got to manage your flip like a business not a hobby. So have rules , systems, budget, and schedules to make sure everything runs smoothly.
Finally Step #5: Sell that flip
Make sure you price your house so quickly, in other words don’t be greedy. You want that house to sell as fast as possible.
You may want to also consider staging your house. Which means decorating them with flowers, furniture, painting, rugs, flowers, whatever you can to make it look “oh so cute.”
So hopefully, if you had a great plan, with conservative with your numbers, manage your flip effectively and sold it quickly. You now made a nice side-able profit that you can roll into the next flip.
Now if you guys enjoy this video, I really need you to help me out and do three things.
Number 1: click the thumbs up sign here on YouTube to tell the” Google Gods” that you liked it. Subscribe to the channel by clicking the link right here. Finally come send me a colleague request over the bigger pockets.com

19 thoughts on “How to Flip Houses – Five Steps to Success

  1. Anyone who flips houses is a soulless scumbag, and anyone who buys a flipped house is a fool. The money is being made by buying run down junk, covering it with cheap paint, and passing it off as a quality home to unsuspecting buyers.

    Flipping is one of the most shameful real estate practices going.

  2. Great Video, site and podcasts. I liked J Scott's alternative to the 70% rule: Minimum Purchase Price = Sales Price (ARV) – Fixed Costs – Desired Profit – Rehab Costs. As he said in the podcast, lumping in the fixed costs with the desired profit as the 30% artificially alters your profits and of course you can best isolate any variables in each particular part of the costs when crunching the numbers. I'm still trying to learn on this, but I'd be interested in what you thought about it.

  3. Once again. Great video. Straight and to the point.
    Brandon, I am heading to Atlanta next weekend. I will be connecting with Ken Corsini who I met through Biggerpockets!!! Happy Investing to you!

  4. Brandon, we want more and more and more videos each week. What camera are you guys using? Want to create our own on Monkeysee for educating buyers and sellers when selling or buying a house.

    Thanks,
    Liz Bobeck

  5. Great job Brandon! I agree with Seth, keep the videos coming because they are very educational and entertaining. Keep up the great work BP! BiggerPockets continues everyday to inspire me to keep pushing forward with my goals and aspirations. Side note I love how you EMPHASIZED doubling budget and timeline. (Because that is the definite truth…especially when your starting out).
    Thanks as always… and this is another tool in our investor tool belt to help guide us to financial freedom.

  6. Great job Brandon. Conciseness is vital to a good educational YouTube video and you nailed it!

    Oh, and I loved the crashing plane! Nice touch. lol

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