January 1, 2007

How to Find a House to Flip

Building Wealth - Passive Income - Real Estate Development

One way to build wealth, build passive income and retire early is to flip houses. Finding a property to flip is not difficult. All it takes is knowing what to look for, knowing what to avoid, and keeping emotions out of the equation. To show you how easy it is, I'm going to let you in on a property I recently purchased to flip. Before I do that, though, I should probably outline my house flipping philosophy.

First, I am in this game to make a lot of money. I know there is tremendous wealth in flipping houses, and I am eager to get some of it. It doesn't take rocket science to understand the art of flipping - find an undervalued, underappreciated house, fix it and add some cosmetic touches, and sell it for a profit. Easy as pie.

Second. In spite of my first philosophical rule, I am not in this to flame out or go bankrupt. I want to earn a lot of money, but I want to do it over time, maximizing profit and minimizing risk. This means flipping one house at a time, over the course of one to two years, until enough cash is built up to become more agressive. Although this probably isn't the most popular track, and isn't the method glamourized on TV, it works.

Finding a House to Flip - Rule #1

Your search for houses should be limited to the following: 3-4 bedroom, 2-3 bath houses with a garage. There are more of these houses than any other on the market, and there are more buyers for these houses than any other. This is good because it will make it easier to find a fixer-upper and when you want to sell it you will have a lot of willing buyers.

Finding a House to Flip - Rule #2

No major repairs!! This is where people get in big trouble. Don't go for the house (especially when starting out) that requires walls to be moved, studs to be exposed, or any other major renovation. You should stick to the flipping houses money makers - new paint (interior and exterior), new carpet, new countertops (kitchen and bathroom), new tile, landscaping, and new appliances. All of these can be done relatively easily and relatively inexpensively and return big bucks. Successful house flippers don't go for broke all the time!

Finding a House to Flip - Rule #3

Keep emotions out of it! It is important to remember that you are not looking for your dream home (that comes in at about home 4-6). You want something that is appealing, needs fixing up, and that others will buy. When you are through, this flip should look like the perfect home for the perfect couple. You aren't going to get to customize it the way you want anyway, so look for properties that maximize profit, not that fit your eye.

Using these three rules, you should be able to find something you can successfully fix and flip, begin building your real estate empire, and retire early!

Fixing and Flipping Houses

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