3 Things You Need to Run a House Flip

May 27, 2015

Running a house flip is no easy task. It takes a patient person with the right resources in order to run a successful house flipping company. As a new real estate investor you need to look at your business one day at a time. You need to have a plan in place. In this article I’m going to cover three things that you need to have in place for every house flip in order to be successful.

Funding

Always have your funding in place before you start a house flip. Part of having a successful business plan is to have funding in place before you ever get a deal. There are a few different ways that you can make this happen. Hard money lenders are a great source of funding. Many real estate investors who are beginning their first house flip use one or more hard money lenders to get their careers off the ground. Search for harm money lenders in your local area and start by getting pre-approved.

Private lenders are another awesome way to fund a house flip. These are normally family and friends who have money to lose. Never ask somebody for money who will miss it when it’s gone. Beginning a house flip project takes a lot of risk. Always let the people you are borrowing money from know that. Banks are another institution that will lend money to a house flip project. These are typically longer term loans and harder to get a hold of, but another viable way to get money for a house flipping project.

A Team

Before you take on a big project like a house flip, you need to have a team in place. You need to have your starters, your backups, and your backup’s backups. You need to have multiple people who can do the same jobs in case you end up with multiple properties. In order to do this you need to start networking. Signing up for a Bigger Pockets account is a great way to get advice on what to do with your house flip. It’s also a great way to find local investors, contractors and realtors.

Another way for you to build your network is through a local REIA. Joining a local REIA gives you access to people who are getting real results with real tactics. These are the best people to ask about hiring team members to help with a house flip. Once you figure out who you need, start building a contact list. Call contractors, plumbers and electricians and introduce yourself. Let them know who you are and what business you’re in and that you may need help with a house flip in the future. Once you get a deal, you’ll already have a list of contacts to call and start getting bids.

Have a Business Plan

You don’t want to go into a house flip without a plan. You need to have an idea of what you want to accomplish, how you want to get there, and an exit plan. Know what you want to accomplish with your house flip. Know how much time and money you want to invest in it and stick to your plan. Figure out what is going to work for you and your business and start putting together steps to make it happen.

After you have a clear vision of what you want to accomplish, make a list of everything you need to do to get there. Find money to fund your house flip. Find contractors to work on it and a realtor to sell it. Make decisive decisions on the steps you need to get your house flip done and get it flipped! Have an exit strategy. Know what you want to happen when the work is done. If you want to sell it then you’ll need to get a pricing package put together. If you want to rent it you’ll need to immediately start looking for tenants.