House Flipping :: Learn How To Flip Real Estate For Profit - Foreclosers

My partner and I which is my brother flipped out first piece of real estate, and thought we had everything figured out. We got an investor with a business line of credit. Found the perfect property, and he had a back ground working for a mortgage company, and I had a packground in construction.

Needless to say that we flip our first property in about 3 months total, but by the end we only made $1,000.00. It was depressing because we had put our hearts and souls into that house, but the flip flopped.

Here are the top 5 reasons the house flip failed.

1. No Home Inspection :: Since we both new what to look for we did not think that we needed a home inspection on our property. Because of this once we found a buyer, and they had the home inspected we had to fix the foundation, electrically and some plumbing under the house which added about $3000.00 to the flip and since the contract was already set that money came out of the profits.

2. Bad negotiation's - instead on telling the buyer NO we did everything they asked including having a $3000.00 drive way poured which also came out of the profits. Our flip was running out of money because of all the repairs, so we got scared and did not want the buyer to walk so we did everything.

3. Bad contractors - we had a couple of bad contractors which added time to the flip because their 3 day job turned into 3 weeks, and they messed up the refinished hard wood. So, always be sure to fire contractors early and get fast and effective ones in their place.

4. Bad Pricing - We sold our house so cheap that it flew off the market, but all the profits were gone. Make sure you are going to make it worth your while when you set the selling price of your flip, and be sure to add a cushion for any added fixes or fees from the buyer.

5. Not reading contracts - when we bought our house it had $1500 dollars do in property tax, and we thought that we paid them, but since it had not be a year they washed the taxes in the contract. But, when we went to sell we had a added $1500 in property tax due, that just killed us.

These are the things that hurt our flip and cost us to look like to big idiot's. So, don't do them! Seriously if you don't want people to make fun of you and call you names like "House Flipping Idiot," then don't do any of the above because you will take house flipping abuse from everyone who told you not to do it in the first place. I don't care because we made over $15,000 on the second flip, but that first house flip was hard.

When you are flipping a house their are many things you need to look out for to see if the property is work investing in.

Once you have your list of foreclosure, pre-foreclosures, and bank-owned foreclosures, then you need to go through you list or houses, and decide which foreclosures look the most profitable, and then you need to go and inspect those foreclosures on your list.

Foundation: Always look for cracks above windows and around doors to see it the house has foundation issues. Also, as you are walk though your house flip see if it feels like you are leaning to one side.

Electrical:: Check the breaker box to see if it is up to code. Also look for bad plugs, and loose wires. Since most flips have no power you can normally only look for problems that you can physically see.

Plumbing:: I you smell a strong oder in the property then this could be the sign of a serious plumbing problem. Also, check fixtures, toilets, and showers for repairs or replacements.

Roof:: When walking the house look up at the ceiling to see if you see any signs of water leaks like wet rings. Also go our side and count the layer of shingles on the house. My last flip had 7 and code is no more than 2.

Sheetrock/Tape and Bed :: How much sheet rock on your house flip is going to need to be replaced.

Paint:: Every house will most likely need paint, but try to figure out how much, and how much it will cost.

Flooring:: Do you need to replace carpet, hardwood (or can you refinish it), tile, etc.

These are the main things I look for when walking through a property that I am interested in flipping

Tip 1 - Be sure to take the time to find quality contractors. Sound easy enough, but finding a good contractor can make or break your budget when flipping house. Using a bad contractor and cost you time and money. People ask me what is the best way to find a good contractor to do work on your property and I say word of mouth. I found one of my contractors from a recommendation from a lady from work, and all I had to do was ask. Remember that a bad contractor will drain your time and profit from your house flip, so chose carefully. When ever you see that a contractor is not working out for you on your house flip you need to dispose of them immediately and get someone else that can do the job. A bad contractor is like a crutch to your house flip, so dump them and move on.

Tip 2 - Before you ever start you flip you need to make sure that you have all of your contractors lined up in order and ready to work. The order that I recommend is first get an inspection of the property to make sure it is not a money pit. If there is foundation issue get it fixed first. If you have to fix your foundation later in the flip you will have to repair sheetrock, trim, tile and so on. Next, send in the electrician so the house does not burn down. Also, sometimes they have to remove sheetrock to run the lines and you don't want to do double work. Then get your contractor in there to do the cosmetics such as paint, trim work, hanging light fixtures, installing sinks and so on. Last thing you want to do if you have carpet is install carpet. The last thing you want to do when flipping a house with wood floors is install baseboards.

Tip 3 - Instead of purchasing materials as you go buy all of the materials for your flip at the beginning of the flip, so that you do not have to make 100 trips to home depot. Buy your paint, trim, doors, sheetrock, light fixtures, sinks, cabinets, and everything else that you can think of. When I flip a house I give my contractor a 200.00 gift card to Home Depot to buy all the miscellaneous items that I did not think of. This saves me time and money by me not have to go to store every time my contractor needs something, and in the house flipping game time is money.

Tip 4 - If you want to get your house flip sold quickly then you need to be sure to hire a high volume awesome real estate agent. You need a real estate agent that is great at negotiating. An agent that looks out for your best interest, and not just trying to make a commission. You need to interview agents and find the right agent for the job. That is willing to go to hundreds of houses when you are looking for those diamonds in the rough properties, and they are willing to do open houses when you're selling your properties. Also, see if you can get them to reduce their commission do to you are going to be the next Donald Trump of real estate and bring them a lot of business. By negotiating with the real estate agent and saving a half percent or a full percent you able able to save thousands on dollars on your real estate flip.

5. Money is made on the purchase - if you want to make money then you have to get a good deal on the buy of your flip. That is why we stress that you find a good foreclosure list that is full of bank owned foreclosures, pre foreclosures, and much more. With a Free List of Foreclosures!
you can find house that are perfect for flipping.

The mortgage market has defiantly seen better days, but if you are an investors then right now is the time when you can find some really great deals at rock bottom prices. We are at an all time high in foreclosures, so you can buy a house for pennies on the dollar. Banks are getting overloaded in there REO (Real Estate Owned) departments with foreclosures and need to move inventory to keep their heads above water. The only way to move inventory is to price the property to sell to avoid carrying cost. The best time for us to buy homes is in a slow market due to that is when you can find the best deals. I know what you're thinking can I flip a house in today's market the answer is yes, but right now is a great time to buy rental properties.

If you're going to flip a house you need to get a great deal when you buy the house, because you will need to be able to sell the house about 5% under market value to avoid carrying cost. Make sure you get an inspection and a good contractor, so you can get a really good estimate of what you cost will be. Like I said it can be done, but you need to make sure you cross your I's and dot your T's before buying the house.

As an investor you know that the best buy's come when everyone else is running away because this is when you can get your house at 50 cents on the dollar, all day long.

If you worry all the time, and stress out over the smallest little things, then don't flip houses. When you flip houses crap goes wrong, and it gets stressful, but you have to learn to roll with the house flipping punches. When you find a plumbing leak, you can't cry and take a day off because the stress it to much. You need to call a plumber and get it fixed, and move on. House Flipping is not a 1,2,3 everything goes perfect type business. It's long hours and hard work. You constantly have to deal with contractors, realtor's, buyers, market conditions, banks, and more. So, what I am saying is if you buckle under pressure, then find a nice desk job. But, if you excel under stress, then house flipping might be right up your ally.

Why Do I Need A Foreclosure List?
Some investor try to find houses without a foreclosure list. Then some of the old school investors still go to the county clerks office for the foreclosure list. The easy way to get a foreclosure list is www.RealtyTrac.com
. www.RealtyTrac.com
supplies you will not only a foreclosure list, but also a pre-forclosure list, bankruptcy list, and your regular MLS listings. If you are a serious investor, and want to be one step ahead of the rest of the pack then you need to get a foreclosure list ASAP.

It is amazing to me to see how a house that has been promoted properly can sell so much faster than one the has been left in the sit and forget mode. Being able to sell your house quickly has everthing to do with prepreation - the houses being sold quickly are more well prepared to accept a new resident. The price you set your house flip at, and the location of the flip are the most important choices when it comes to a quick sell, but there's also more than meets the buyer's eye. Here are some quick sell tips to make sure your house flip sells as soon as possible.
(a) Find the best real estate agent in your area, one that is hard working, and knows how to get your flip sold.
(b) Do a walkthrough of your house flip and look to see if there is anything that potential buyers might turn their face at, and then fix it.
(c) Use every source of advertising at your disposal. I have found craigslist, and google ppc to be extremely helpful in getting the phones ringing on my house flips.
(d) Offer incentives.
(e) If you can't sell the House Flip then rent it out.

Discuss with the renters that your initial need is to sell the house. A rented house with an option to buy is also a good idea
If you don't feel like renting you can sell it at a discount to someone how does by rental properties.

I hope these tips will help you to get your house out on the market and sold faster, so that you can move on to your next house flip, and start to build wealth.