Did you know that flipped home sales account for at least 5% of all home sales in the US? In fact, in the second quarter of 2020, flipped properties represented 6.7% of all sold homes.
While 5% to 6% seems small, it’s not if you apply it to the total number of homes sold in the US each year. For instance, in 2020, existing US home sales totaled 5.64 million properties. That means there were at least 282,000 flipped homes sold that year.
With all that said, you may be wondering how to flip properties and what you need to start doing it. Do you even need to be a real estate professional to start flipping houses?
We’ll answer all those questions in this guide, so be sure to keep reading!
Table of Contents
Decide Which Types of Properties You Want To Flip
The first step on how to flip houses is to decide if you want to do standard homes and mobile houses. Standard homes are those permanently fixed on a piece of land. Mobile houses are often a type of “manufactured” home and may not have a permanent location.
As such, mobile homes often require registration and licensure with motor vehicle agencies. It’s also for this reason that some states require mobile house flippers to have a dealer license. So, factor in these differences first before buying and fixing up a property without a land title.
Check Your State’s Licensure Requirements
For example, in Arizona, you need a license to buy, fix, and sell more than two manufactured homes per year. In California, you need a dealer license before you can even flip just one manufactured house.
Build a Team of Professionals
In some areas, fixing up a property requires the services of a licensed contractor. That’s because some municipalities only issue certain permits if acquired by these professionals. Only licensed and bonded contractors can obtain plumbing, electrical, and mechanical permits.
If you fail to get these permits, your local government can stop your flipping project.
So, at the very least, make sure you have a team of licensed plumbing and electrical contractors. You should also work with engineers, architects, and realtors. A title insurance provider can also help make sure the properties you fix have no title issues.
You should also team up with a fix and flip financing company. These lenders offer renovation-mortgage loans for those who want to engage in flipping. With their help, you can secure more funding so that you can buy, fix, and sell multiple properties.
Place a Cap On Your Budget
In 2020, home flippers made as much as a 44.4% return on their investment. To follow in their footsteps, you should always aim to buy as low as ethically possible. This way, you won’t go over your budget once you add the cost of repairs, contractor fees, and closing.
Keep This Guide on How To Flip Properties Handy
There you have it, your brief but straightforward guide on how to flip properties. Remember, you may not have to be a licensed real estate agent, but you may need a license to flip mobile homes. Also, unless you’re a licensed contractor, you need to work with them to get the ball rolling.
Ready for more money-making ideas to boost your profitability? Then please feel free to browse our other informative guides and resources!
