10 Useful Home Flipping Tips from Experts: The Ultimate Guide to Home Flips
When it comes to the game of real estate, experienced home flippers play at an expert level. The more properties home flippers purchase, renovate, and sell, the more experience they have under their proverbial tool belts. Read on as we reveal 10 tips from some of the top home flippers in the nation.
1. Incorporate gently used items into your home flips.
Kaleigh Sullivan from KD Development reminds us that furniture, fixtures, and decor don’t have to be brand new to complete a renovation. She encourages flippers to purchase home goods from the Facebook marketplace, consignment shops, or garage sales. Doing so will save you a load of money!
I love working with outdated items in the home. On our last project, I transformed hollow core doors into art pieces and backboards for beds. I put in $60 for large pieces of artwork that no one could buy elsewhere.
2. Use the 70% rule when choosing your next flipping project.
Lincoln Edwards and Lauren Ahrens, also known as the Austin Flipsters, remind us to follow the 70% rule when renovating homes. You shouldn’t pay more than 70% of the home’s post-repair value minus any repair costs. You will need some “cushion” to account for any surprise issues with the purchased home.
3. Heed the design trends of top-selling homes.
Jake Leicht, a well-known real estate investor, encourages us to observe the common design trends of top-selling homes in the area. Initially, Jake found himself fixing up houses according to his personal preferences. But they’d just sit on the market. He wasn’t sure what to do and reached out to a colleague for advice.
His friend mentioned that the neighbors didn’t care for his style, which was humbling. Jake began changing his ways. Even if the surrounding trends don’t suit you, choose a subtle version to blend in and appease potential buyers.
But don’t believe everything you hear! You may also have neighbors with questionable taste who try to give you sellers’ advice. This was the case with one of our most recent flips. Our client was disturbed by her neighbor’s forward approach to her home not selling and told the client that the home looked weird after a renovation. This neighbor also lived in a home that the seller would not live in. Always assess the feedback and where it came from. It can make all the difference.
The home was purchased by an out-of-state attorney who LOVED the home and remodel. Sometimes, you need to find a BIG fish who sees your value. Most often, it’s those who are closest to you who doubt your potential the most.
4. Hire a real estate agent for your home flips.
Amber Miller from Threshold Homes reminds us of the importance of expertise in home flipping. You just don’t know what you don’t know.
Ask trusted friends, family, and colleagues if they recommend any realtors in the area. Ask potential realtors for references and how many homes they’ve sold. Realtors can analyze data for homes in the area, including recent comparable property sales.
You can also ask whether they’re skilled at dealing with investment properties, which will be helpful in your home flipping process. I recommend Keller Williams Northern Montana in Great Falls, as this is where I buy and sell real estate in my hometown.
5. Look for off-market properties.
Gerald Harris, a real estate investor, challenges us to seek properties in unique ways. You can do this by networking and chatting with contractors, realtors, and builders. He also suggests we attend foreclosure auctions. You can even knock on doors and write letters to state your intentions to current homeowners (in a respectful manner, of course). This can help you get a “pulse” for the area.
6. Don’t be afraid to ask for help.
Wendy Doris, a house flipper and design consultant, notes that sometimes we are so ingrained in a project that we’re just not sure what our next steps should be. Doris experienced this in Phoenix in her own backyard. She was uncertain of how to plan her desert landscape. She finally sought outside advice, and things went beautifully. The landscape designer drafted a plan she could reference later and complete on her own timeline.
7. Try to find a property with “good bones.”
Cody Tromler, from realtor.com, cautions us to focus on structural integrity. If a home simply needs some cosmetic improvements, such as refinishing the cabinetry, new hardware, and fresh paint, you’ve got a property with good bones. But if the property needs a new roof or the ductwork needs to be replaced, getting this home flipped will be extremely expensive. You probably want to pass on this property and continue your search.
8. Don’t flip a home without a building permit.
Authors Glenda Taylor and Tom Scalisi from bobvila.com offer crucial advice: get a building permit when conducting major renovations. If you don't follow the correct protocols, you could face fines, lawsuits, and other major issues. For example, some financial institutions will not always approve loans for property renovations that don’t follow local codes.
I have worked with wannabe contractors who said they could wire the home and were not professional contractors. Not a good idea. This becomes a liability, and someone could lose their life. I stay far away from individuals who try to save a dime and are too foolish to think about the liability or risk to another’s life.
9. Get Vacant Home Insurance for your home flips.
Danny Johnson, the host of The Flipping Junkie podcast, reminds us to get Vacant Home Insurance before closing on a property. Squatters and vandals often loiter in vacant houses and leave damage behind. You’ll need a builder’s risk policy to give you coverage while working on the home or even as it sits.
We have a beautiful fixer in downtown Great Falls that we are patiently waiting to renovate. Many squatters have visited the property, especially in the summer evenings and weekends. We have spent a few unwanted evenings running off the uninvited and sometimes having to call the police.
But there have also been times when we were able to pray and encourage the homeless. I fondly remember a couple who slept on the property. They were kind enough to leave when we pulled up and asked them to leave early that summer morning.
10. Know your home flipping options: rent or sell.
Kristin Luna, from ThisOldHouse.com, reminds us that we have options after renovating. You can rent the property to a tenant or resell the home. Reselling can ensure security on the risk of your investment property. When you receive steady cash flow during a turbulent economy, renting the property could be a safe bet.
Whether you’re a seasoned home flipper or new to the game, adhere to these suggestions. These home flippers know the real estate market in more ways than we can fathom. Have patience, trust the process, and enjoy the ride. It can be a bumpy and turbulent ride, not for the faint of heart, but it can be incredibly rewarding.
So, there you have it - 10 useful home-flipping tips from experts. We hope you learned something, and we wish you the best as you explore your options as a home flipper.
