How to Get Into Flipping Houses

Funding

Before you spend one ounce of money or energy looking for properties, you need to figure out the financing piece.

How are you going to pay for your first property, and cover the rehab and holding costs?

Do you have the cash sitting in your checking or retirement account? Do you have a line of credit? Or are you planning on getting a hard money loan?

If it’s in a retirement account, is it in a Self-Directed IRA? If so, does that IRA give you checkbook control?

Learn How to Estimate Repairs

You have to learn how to recognize and estimate the costs of the work that needs to be done when you’re looking at houses.

Yes, you’re going to have an inspector that you’re going to pay to help you, but inspectors won’t do that for free.

You might have to 20 or more properties before you find a property you want to make an offer on; paying an inspector each time you lay eyes on a property can get expensive REAL quick.

Inspectors are paid to confirm your own conclusion that the property is a go. That initial conclusion is up to you.

Get it Inspected Before You Buy

NEVER close on a house without getting it inspected by a professional first.

It’s a terrible feeling being stuck with a house that’s going to cost you two times as much as you thought it would cost to get it fixed-up.

I’ve been there. It is NOT fun.

Learn How to Schedule Repairs

The order that the repairs are done is crucial.

We always handle electrical and mechanical repairs first before moving on to other items in the house. (Image: Editor B/Flickr)

You don’t want to refinish the floors before you fix the roof; only to have the rain come in and mess-up the floors you just paid to have done.

If you don’t schedule the repairs in the right order, it can and will cost you money…

…not to mention it’ll extend the rehab time period, which in turn costs you money as well.

Learn How to Pick Contractors

There’s more to picking contractors than just picking the person with the cheapest prices. Quite often, they’re cheaper for a reason.

I prefer contractors that are insured, bonded, and licensed. They tend to cost more, but the quality of work and reliability that they tend to have is worth it to me.

It’s normal for it to take some time to find a couple general contractors that you like and trust, so be patient.

But don’t mistake “being patient” as an excuse to go hiring people willy-nilly. The better you are at screening through prospects, the faster you’ll find a good one.