How To Flip Real Estate (Part 4 of 4)

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Find Foreclosed Homes (Part 1 of 4) https://www.youtube.com/watch?v=WBjJPzoaUpQ&list=PLQpcorA_tgqseIUwyo9fQrGt9ITm7sZCC&index=1

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How To Flip Real Estate (Part 4 of 4) (current video)
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Flipping Houses: How It Works, Where to Start

The road to real estate riches isn’t all about curb appeal and sold signs. Far too many would-be real estate moguls overlook the basics and fail—including flippers. These individuals purchase and renovate properties before putting them back on the market to make a profit. If you're going to flip a home, make sure you have the cash, time, skills, knowledge, and patience before you lose out. But how do you avoid these mistakes?

How Flipping Houses Works

Flipping is a real estate investment strategy where an investor purchases a property to sell it for a profit rather than use it. Investors who flip properties concentrate on buying and reselling one or a group of properties. Many investors attempt to generate a steady flow of income by engaging in frequent flips.

So, how do you flip a building or house? The key is to buy low and sell high. But rather than adopt a buy-and-hold strategy, completing the transaction as quickly as possible is essential. This limits the time that your capital is at risk. In general, the focus should be on speed instead of maximum profit. That’s because each day costs you more money in mortgage, utilities, property taxes, insurance, and other costs associated with homeownership.

Where to Start

Limit your financial risk and maximize your return potential. This means you should pay less for a home. And make sure you also know how much the necessary repairs or upgrades will cost before you buy. Once you have this information, You can determine an ideal purchase price.

There is a rule called the 70% rule. It states that an investor should pay at most 70% of a property's after-repair value minus any repairs needed. The ARV is what a home is worth after it is fully repaired. Here's how it works:

If a home’s ARV is $150,000 and needs $25,000 in repairs, then the 70% rule means that an investor should pay no more than $80,000 for the home: $150,000 × 0.70 = $105,000 - $25,000 = $80,000.

Like any other small business, flipping requires time, money, planning, patience, skill, and effort.

KEY TAKEAWAYS

Flipping is a real estate strategy that involves buying homes, renovating them, and selling them for a profit in a short period.

Flipping houses is a business that requires knowledge, planning, and savvy to be successful.

Common mistakes novice real estate investors make are underestimating the time or money the project will require.

Another error that house flippers make is overestimating their skills and knowledge.

Patience and sound judgment are essential in a timing-based business like real estate investing.

Written by James McWhinney, reviewed by Chip Stapleton, fact-checked by Vikki Velasquez, revised by David Wadley
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Music: "Like A Pimp" by David Banner (instrumental)

Music Video Produced and Edited by The Price Bandit (David Wadley)
Supervising Sound Editor, Motion Picture Editors Guild (MPEG), IATSE Local 700

Video Clips: How To Start Flipping Houses in 2024 (Beginners Guide) Black Real Estate Dialogue Podcast featuring Welby Accely, interviewed by Sam Dolciné

Full Welby Accely Interview https://youtu.be/pFyO3gSAfj8?si=X6QpwGJIXUq3cKti

Additional Video Clips: The Wire, Michael Keeps The Count | Magic Johnson's Most Memorable Passes

Movie Clips: The Mack featuring Max Julien, Paul Harris, and Richard Pryor

David Wadley, the writer, producer, and director of Dark Angels (1998) and Founder of Black Film School on YouTube, produces and edits music videos showcasing R&B slow jams and old school remixes as The Price Bandit.

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