Thanks to several reality shows, flipping houses has become an appealing way to raise money. It’s true that buying, renovating, and reselling properties can be profitable, especially if you can flip multiple houses in a year. Some people can flip as many as seven houses each year, but amateur flippers may be lucky to flip just two houses.
What You Need to Flip Houses
How many houses you can flip in a year depends on four main factors:
- The capital you have
- The current housing market
- The availability of properties
- Your free time
You can have all the money in the world, but if there are no properties to buy or you cannot dedicate time to finding and managing them, you won’t get much done. On the other hand, if your budget is too tight, you’ll struggle to make progress with renovations that will appeal to potential buyers.
Still, it’s possible to manage these factors. For example, if you have enough capital, you can work with a trusted real estate agent or contractor who can take over some of the day-to-day responsibilities of finding properties and making repair decisions. If you find flipping is profitable enough, you could make it your full-time career, which will let you flip more houses.
Experienced house flippers can sometimes flip seven or more houses per year. However, they’ve likely been at it for some time and have the partnerships, connections, time, and funds to make the process go more smoothly. A house might sell in just a few days in a hot market, but there’s no guarantee that will happen–or that the market will remain favorable for long.
Expect the Unexpected When Flipping
Even with that experience, hiccups will sometimes still happen. Supplies might suddenly increase in price or become back-ordered, houses might need unforeseen and expensive work (other flippers may have spotted the warning signs and passed it up), the weather may turn suddenly, workers may sustain injuries, or a buyer’s funding could fall through. These examples can all slow down the work on one flip, preventing you from selling and moving on to the next project.
You don’t want to bite off more than you can chew as a flipper. Don’t back yourself into a corner where you cannot pay your own mortgage unless a house sells. Instead, start with one house and use it as a learning experience. Move on to the next once it sells, and improve your process and profits as you go.
If you want to compete with flippers who may have experience, availability, and capital that differ drastically from your own, a rehab loan can help. Contact Hard Money Lenders to learn more.