House flipping is a form of wholesale real estate investing in which a person purchases real estate, makes improvements to it, and then offers it for a profit. With between 5 and 6 million houses being sold each year in the United States, it is one of the few investment sectors that has remained unaffected by the COVID-19 pandemic.
It takes money, knowledge, skills, and patience to engage in fix-and-flip real estate, but it is a quick, enjoyable, and lucrative strategy that successful real estate investors of all backgrounds find irresistible. There is than house-flipping shows might have you believe, and on top of that, it’s harder to make money than you might think.
Keep reading for details on some of the most successful house flippers, as well as some details on what it takes to start flipping houses efficiently for a profit.
Traits Of Highly Successful House Flippers
There is more to flipping houses than house-flipping shows lead on. Many factors and unforeseen circumstances can affect your ability to turn a profit from a house-flipping business. Market awareness, appraisal ability, experience with renovation costs, and real estate agent negotiations are all necessary skills one must have if one expects to flip houses effectively.
Successful real estate business owners and real estate license holders are great at determining a buyer’s ability to pay, and confirming that they have the cash if the vendor only wants a cash buyer. Most of the time, you will sell to retail customers who obtain loans in order to meet the purchase price. Failure to finance a loan can lead to a lot of problems.
Needless to say, it is also important to have patience as a professional home buyer and to avoid making rash decisions when investing in a house-flipping project. Being shrewd about the asking price, and when and how to spend or save money as a house flipper can end up making your renovations and negotiations much easier in the long run.
The Friends actress Jennifer Aniston has a history of profitable transactions under her belt. In fact, she made a sizable profit on the Los Angeles mansion she and her ex-husband Brad Pitt purchased back in 2001.
The Morning Show host is presently residing in the stunning mid-century modern Bel Air home that she and her ex-partner Justin Theroux paid $21 million for in 2012. Going independent after her split from Brad Pitt in 2006, Aniston paid $13.5 million for a super-stylish 1970 Hal Levitt masterpiece.
She collaborated with architect Stephen Shadley to fully renovate the building. “We basically tore the house apart and rebuilt it,” the actress told Architectural Digest in 2010. Hawaiian, Japanese, and Balinese design elements were used to turn the 10,000-square-foot house into a tranquil haven. The name “Ohana” was given to the property by Aniston, who chose the Hawaiian term to represent the ideas of unity and extended family.
A Successful Real Estate Investor Must Work Quickly
Ideas need to be executed quickly in order to be effective. You might consider this a benefit because it enables you to close more deals and earn more money by finding a real estate deal swiftly and successfully flipping it. That is true, but it is not the primary factor speed plays in success.
The main justification for moving quickly is that doing so lessens the likelihood that unforeseen issues will arise and completely derail your investment. Unpredictable and unexpected things are more likely to happen the longer a project takes. You must act swiftly to put good ideas into action when they arise. They will wither on the bush if you don’t. You must increase the speed of your implementation if you want to be extremely effective.
House Flipping Demands Efficient Renovation
It may seem obvious, but it takes a lot of experience and know-how to efficiently renovate a property for house flipping. Aside from the initial appraisal, there are a plethora of design and implementation problems that can make or break your bottom line at the end of the day. The more equipped you are to deal with emergent scenarios and effectively execute a valuable reno, the more likely it will be that your investment will pay off. Even if you are working through a specialized contractor for your renovations, it’s important to be aware of the cost of materials, labour, and the value of various renovations.
Nick and Christian Candy
Christian and Nick Candy, siblings who work in the British real estate industry, have made millions through the purchasing and selling of properties over the years. The brothers’ best bargain, however, has to be the Monaco penthouse they acquired from billionaire heiress Lily Safra in 2006 for between $16 million and $20 million.
The real estate moguls spent up to $50 million through their business partner Candy & Candy on a lavish renovation of the three-bedroom, six-bathroom, 17,500-square-foot penthouse with the enticing name La Belle Epoque. It took 18 months to finish the renovation. The Pinnacle List reports that Prince Mohammed bin Rashid Al-Maktoum of the Dubai Royal Family purchased the breathtaking penthouse in 2010 for a record-breaking $323 million.
Flipping Houses Takes A Lot Of Due Diligence
When a home is fixed up, house flippers can forecast with a high degree of accuracy what it will sell for. There is no gambling involved; instead, a lot of science goes into analysing similar sales as well as withdrawn and expired products to predict what will happen. It is superior to an evaluator in every way.
However, it’s only the first step in the due investigation process. Knowing what surprises you might encounter is important, particularly if you’re buying a rehab, in addition to comps. They, therefore, serve as a monitor. They are superior only because they are able to see things that even an examiner cannot. They are also aware of the types of complaints that new customers will make and refrain from making.
It also entails being alert to potential side issues. The majority of the time, when attempting to resell the property, people make mistakes in their due diligence that they later regret and pay dearly for.