Flipping Houses as a Business: TV Shows and Reality

Judging by the number of television shows and books devoted to flipping houses, it would appear that transforming houses from ugly stepsisters to the belle of the ball has become the latest equivalent to the old-fashioned American Dream. However, since my husband and I have been flipping houses since 1979, I'm here to tell you two things: it's not as easy as they make it appear on TV, but you CAN make money doing it.

Fisher Family on Flip That House

If you're thinking about taking the plunge into house flipping, the first thing you need to know is that most of the time the project will take considerably longer than you expected. We've made some truly spectacular profits flipping houses in a very short time, but those are the exceptions rather than the rule. Two reasons we make more than other house flippers:

1. Our location, Southern California, has mostly appreciated more than our monthly expenses of holding the property.
2. Instead of spray painting everything white and installing boring beige carpet, we use interior design strategies to create buyer's dream homes.

The second thing you'll need to know is that flipping homes is time-consuming. If you’re serious about it, you can make it your fulltime occupation, but if you're doing it strictly as a hobby, I suggest that you either reconsider or give up your other hobbies during the course of the project, because flipping a house will take up a lot of time you used to devote to other pursuits.

The best homes to flip will involve as little work as possible, which means they need to be structurally sound and in need of mostly cosmetic improvements, including paint, carpeting, bathroom and kitchen upgrading, and landscaping. You'll also need to pick up the house at a good price, preferably at least 25 percent below market value, to allow you to make some profit at the end of your project.

Remember, your goal is to make a house look and feel at least as good as every other property in the neighborhood when you're finished. That means the property has to be in a desirable area to begin with. The old location, location, location adage is extremely relevant when choosing a flipping project. You're looking for the worst house (within reason) in the best neighborhood you can find if you want to make the maximum amount of profit in the end.

Focus your energy on necessary repairs and upgrades. Fix broken windows and leaky roofs, but don't add a waterfall pond or swimming pool. Those types of additions don't add enough to the overall value of a property to justify the expense, which means a decrease on your bottom line. In every situation, ask yourself how much value will be added compared to the cost of an upgrade.

Speaking from thirty years of experience and dozens of flips, I can tell you that there is definitely some good money to be made in the business. However, you also need to know that it’s not as easy as they make it seem on TV and that it will generally cost more and take longer than you originally thought. Even so, if you approach flipping houses like a business and pay close attention to every detail along the way, it can be a great way to increase your net worth!

More information about Flipping Houses

Home
Home Staging
Sitemap