House Flipping Myths DEBUNKED!
There are hundreds of myths surrounding house flipping , way too many to address in this blog. Here is a list of some of the more common ones heard and why they just aren’t completely accurate.
1. You need a lot of money to flip houses
- While having a lot of money is certainly helpful, it is not completely necessary to invest in property. Even when you do have money, it is much easier to find a business partner to split the investment with and have you both make profit. Finding a hard money lender or partner isn’t as hard as you may presume. You just have to get out and look!
2. If you have bad credit, you are out of luck
- Usually when you think real estate you think mortgage and banks. If you have great credit and a good relationship banker, go for it. This does not mean that if you have bad credit you are out of options. This is where the private investor comes in, and although this may seem like a foreign concept to some people, its one of the best ways to get funding for your deals. A private investor can be anyone from a cousin to a neighbor to your doctor! You will eventually find someone willing to listen about the opportunity to make some extra cash.
3. You have to be good at construction to flip houses
- While renovating experience can definitely come in handy, it is not imperative. In the end, you may actually save money hiring a crew of professionals to do the work for you in a more timely fashion, as opposed to doing it yourself. Even the most experienced contractors will hire other sub-contractors to work on the highly specialized parts of a rehab project like electrical, plumbing and such.
4. You have to sell immediately
- Okay, realistically when it comes to flipping, time is money. Yes the longer you hold on to a property, the more money you lose. Between the finance charges from your lender, insurance, taxes, utilities and maintenance, these costs can add up! While these facts all suggest that you need to buy, fix and sell a flip as quickly as possible, this is not always the case.
You may consider buying the property and keeping it as an investment. The income stream is very tempting.
If you follow these rules and you’re in the green after you do all of your calculations, then it’s most likely a worthy buy. Just remember, no risk, no gain and at some point, you will need to take the plunge! Good luck.