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Tarek El Moussa paid $115,000 for the first house he ever flipped, according to CNBC. He and his ex-wife, Christina Anstead, then spent $15,000 to renovate the fixer-upper in Santa Ana, California. They sold it for $169,000 for a profit of $34,000.
That makeover, in 2010, launched the popular HGTV show “Flip or Flop” — and inspired Americans to try their hand at the potentially lucrative business of house flipping.
Put simply, the process involves the purchase, renovation, and sale of a home for profit. And in theory, the strategies for success are similarly simple — you want to buy low, fix up the property, and then sell high. But the process is far from a walk in the park.
An aspiring flipper has to identify a property worthy of the cost of a facelift, which requires weighing factors from the area it’s in and the level of renovation required to the health of the local sales market and the financial risks at stake — and more.
To help you get started, we’ve gathered the best advice from serial house flippers who are also expert real-estate investors.
Follow these steps to get started flipping houses.
1. Get educated
Before flippers get started on any project, it’s essential they know what they’re doing and outline their plans.
Real-estate amateurs need to take time to get educated, El Moussa told Business Insider. The veteran entrepreneur even teaches a course, HomeSchooled by Tarek El Moussa, that uses tips, templates, and personal stories to help new flippers get started.
El Moussa emphasized that it’s important to understand the basics first because flipping is a risky business. Just because a house looks like a dump doesn’t mean it’s a good deal, he added.
Books (“The Flipping Blueprint” and “Flip Your Future,” to name just two) or YouTube tutorials are other ways to bone up on the best advice before diving in and making an offer.
“It’s not rocket science,” El Moussa warned, “but it’s a process.”
2. Identify a property
The first and most important step, El Moussa said, is finding the right home to flip.
Flippers often work with real estate agents they trust, he added, who can identify good deals and opportunities on properties in communities they know inside and out.
But you can also do some of the research yourself.
In an interview with Business Insider, HGTV star Tamara Day said that when it comes to sussing out the next house she wants to renovate, she spends some time browsing listings and scouting open houses in her area of expertise — Kansas City.
Some things the “Bargain Mansions” host looks for when vetting a property include a bargain price, how much renovation is needed, the interior square footage, the amount of outdoor space and the condition of the surrounding properties and neighborhood.
Day, who also told Insider the most common mistakes when flipping a house, also pointed out that the history of a home can be telling.
“It’s always a positive when it’s [the home] had the least number of owners, right? So if …read more
Source:: Business Insider