In this article, I will share with you how to start house flipping business and how to play this house flipping game as a beginner. To get the maximum profit in the house flipping business, you must know the actual value of your house.
Make that asking price super high, and nobody will buy your property. That house will remain vacant for years. So, be very careful when you set an asking price for your property.
Table of Contents
- How to A Start House Flipping Business
- A Real-Life Example of a House Flipping Business
- Verify at least Ten Similar Houses
- Watch the Property Cycle in that Area
- Agent and People in that Area
- How to Find those Kinds of Houses
- The Way to Prospecting
- House Flipping How to? A Perfect Fix and Flip
- You Need The Best House for Flipping
- The Art of Advertising in House Flipping
- Now Let’s Move to the Networking
How to A Start House Flipping Business
First, make up your mind that you will give it your 100% because it’s not like a part-time job that will make you money out of thin air. You will invest your whole savings in it, so you have to make up your mind first.
Then you search and analyze at least 20 houses before buying one. Although, most investors recommend to analyze 50 – 100 houses before buying one if you are a beginner.
I think that is too much and time-consuming. You can use the 20 houses mark. But remember this manta:
- It’s good to leave a good investment than to buy a bad one.
Be 100% sure of the potential of that house, and then invest your money. Otherwise, you will lose everything you have. Here is a real-life example of how to start house flipping or how to play the house flipping game.
A Real-Life Example of a House Flipping Business
When selling a price for your house, use this example. For example, you have a good house in a good neighborhood, and your asking price is $100,000 for a 900 sq. ft property. In that neighborhood, that kind of property with almost the same amenities is selling for $75,000. Not even close to your asking price.
Now you tell me will they buy your house? Will they give you an extra $25,000? No, I don’t think so. They will not even talk with you on that matter. You will get stuck there for years.
But you can make it right by setting the right price for your property. No, you can’t make it $75,000. Your house might be valued a little more than that, maybe $80,000 or $85,000. You need to know that.
But how? By following these three steps that I am going to share with you.
Verify at least Ten Similar Houses
Analyze a minimum of ten similar properties in that neighborhood by the sq. ft, design, street view, overall condition, and the age of those properties.
Ask other property owners, what price they had bought the house and what made them choose that house instead of that. Try to get as much information as you can from those similar properties. So, you can make a good decision on that.
Watch the Property Cycle in that Area
What I mean, in every market people buy houses in a cycle. They shall buy property in a particular month for a good reason.
If you can find these data, you can target them directly with your marketing techniques. That way, your house will sell faster.
As you know, in the last two years, the property cycle going nowhere due to the lockdown. Everything is out of hand. But still, you should check them out by analyzing at least ten years’ data. That will help you dramatically to flip your house faster.
Agent and People in that Area
Ask your trusted agent what might be the right price for this property? Ask some neighbors, what is the right price according to you? They all will give you some more ideas on selecting the right price.
Make a good decision, don’t stretch the price. Otherwise, you will face a huge problem. Now move on to part two of the business.
How to Find those Kinds of Houses
In the house flipping business, you need to find a house whose owner is, first, super motivated to sell the house at a below-market price.
Second, it is a place where people want to live, and it’s a house with updatable opportunities or something that needs improvement.
Try to match your investment house with these three formulas, So that your flipping business can earn huge returns.
We will use three steps to do that
- Prospecting: the art of identifying a good client.
- Advertising: ways to make them notice.
- Networking: to get quality leads.
The Way to Prospecting
Let’s assume that you have chosen a neighborhood where you want to invest. Now you will prospect for a potential buyer to find an answer to these questions:
- Who is my customer, and where can I find them?
- What am I trying to sell?
- What is my product exactly?
I think your product is “Fast cash and No Hassle.” You will give them the money they want in a few weeks without any hassle.
House Flipping How to? A Perfect Fix and Flip
The most important in this flipping business is to identify a great house. We will use three ideas to find a great investment house.
- Start searching for a house near your home or office.
- Drive to that area or take a walk and find out which house is vacant here? Because a vacant property has a motivated seller who wants to get rid of that property, selling it for a below-market price.
- Try to find a house where an improvement is needed.
- The waterline, electrical line, the floor, and the paint need updating.
If required, hire a home inspector to know how much will it cost you to repair all these. After updating the house in a few weeks, you will sell it for a profit. That will be a perfect flip, a perfect “Fix and Flip.”
If you take a walk in that neighborhood and ask them, you will be able to know:
- Which one is vacant?
- What needs improvement?
- What might be a good opportunity?
So talk a walk, ask them and find these things out.
You Need The Best House for Flipping
Let me remind you, if a property does not match your criteria, you shall pass it until you have found the best property according to your need.
Always remember these formulas when flipping:
- “Your profit is made when you buy, not when you sell.”
- Don’t mind if you have missed a great opportunity, but never buy the wrong one.
- It’s better to pass ten great opportunities than buy a disaster one.
So be very careful before you choose a house to buy. Be very careful.
In Prospecting, you will go to them to buy their houses. But can you tell me, how can you make them come to you to sell their stuff? That is called “Advertising.”
The Art of Advertising in House Flipping
Where the most effective method is “The Direct Mailing System.” Yes, it’s old, but it works.
- The Direct Mailing System
- Business Cards
- Street Signs, Ads, Podcasts, and Blogs
1) The Direct mailing System
You will send some direct mails to the prospects, to your customers. Assuming you have used the “Prospecting” method to choose a good house to buy. Now you will send them direct messages to buy their homes.
Your mail should be short and simple, right to the point. For example:
- “We buy homes. Contact us.”
- “Need to sell soon! We can help.”
- “We buy homes hassle-free.”
Write these as a heading with some short explanation of the house you want to purchase. Add a ‘call to action’ (mostly a phone no) to that mail. So they call you instantly to sell their homes.
2) You Need to Maintain the Frequency
For example, in the first case scenario, I will send ten Mails to ten customers, the second, I will send ten Mails to five customers within one month from sending the first one.
According to you, what strategy will work best? I think the second one because I have sent them Mails frequently. They shall read it as I am motivated to buy their homes.
And maybe some of them will call assuming 10 out of 100. Your focus is to buy one house out of those ten. So you shall analyze them accordingly.
That is called “A perfect method of direct mailing system.”
3) You Can Send Them Business Cards Also
Preape a good-looking, simple business card and write on it “we buy homes” or “sell your house hassle-free.” I mean, whatever you need to attract their attention in the first place with a “call to action.”
Send those cards to your prospects in that neighborhood you are trying to purchase a house for flipping. It’s one of the best methods to generate quality leads for your business.
4) You Can Use Street Signs, Ads, Podcasts, and Blogs
You reach out to your customer by creating billboard ads, social media ads, creating a podcast, or targeted ads on property blogs. Door hangers and T-shirts could change the game for you if you apply those effectively.
You have a lot of options to do advertising in your house flipping business. The question “what will work best?” Nobody knows. Only you can answer that by doing the necessary research.
Now Let’s Move to the Networking
Tell everyone that you deal in properties. You buy houses, fix them up and sell them for a profit. Announce everywhere to your friends, family, and relative, and let them know what you do.
If somebody wants to sell their homes, you can help them out without any hassle. Remember:
- “It does not matter what you know, but who you know.”
Make connections with the local brokers, developers, and anyone who deals in real estate. Build a rapport with them, and let them know you flip properties. They will send you quality leads.
So, go out and network with the people.
So, here is how to start house flipping business. The House flipping game is a massive and frustrating job. Control your emotion to make the right decision. Remember, in this business:
- “You make a profit when you buy, not when you sell.”
You have to follow three steps to become a successful investor in the house flipping business.
- Prospecting: identifying a good client.
- Advertising: make them notice.
- Networking: get quality leads.
And “leave a great opportunity but never buy the wrong one.”
I have shared more ideas about this house flipping business with you. You can read these articles to get more knowledge about the flipping business.