You know the formula — buy an “okay” home with good bones, update with modern finishes, then put it back on the market and collect the profits. Sounds simple, right? Success stories and popular television shows make house flipping seem tempting to many home buyers. But what does it really take to flip a house?
Popular shows on HGTV like “Flip or Flop,” “Vintage Flip,” “Flipping Vegas,” and “Master of Flip” highlight the ups and downs of investing in properties that have seen better days. Up against limited budgets, tight deadlines, demanding investors, and unforeseen challenges with building permits, inspectors, drainage, roof repairs, and more, these experienced teams transform each disaster into a dream home – all while maximizing profit.
House flipping looks profitable and fun when the good guy wins in the end, right? But bear in mind, television has all the power and magic of editing and professional house-flippers. For the inexperienced and uninformed, house flipping comes with huge risk.
Take the Time to Research Before Flipping a House
Before you purchase a home to flip, do your research on what house flipping actually takes. Get to know the average budget for any home projects you’re considering, then add a budget for the inevitable costly surprise.
It’s also smart to find a local Colorado expert, like a REALTOR® or real estate agent. Your agent can connect you with professional contractors or experienced house flipping entrepreneurs. They’ll also help you understand the risks and rewards associated with the real estate side of house flipping.
If you’re not already working with an agent, you can connect with a local real estate professional on REcolorado.com.
House Flipping Tips:
- Find a knowledgeable REALTOR and tell them you’re interested in flipping a house. A real estate agent with experience locating distressed properties can help you understand real estate trends and values in Colorado neighborhoods.
- Understand the tax consequences of house flipping. Your real estate agent can connect you with local tax experts if they don’t have the answer.
- Know your financing and lending options. Your agent can help you identify programs you qualify for.
- Set clear expectations with contractors and any investors. Make sure everyone understands the terms and timelines.
- Hire an experienced and reputable contractor, not based on the cheapest price but on expertise. Any shortcuts on structural, electrical, or plumbing will likely be found in an inspection when you sell the home.
- Don’t over-improve. Understand design trends but stick to generic design palettes for best marketability. Unlike a personal home, you’re not renovating for your own tastes.
- Include curb appeal in your improvements.
- Include a 20% contingency fund and add 30 days to your budget!
If you’re ready to take the plunge into house flipping, search homes for sale in Colorado on REcolorado.com.
Additional Resources about Flipping Houses:
“How to Flip A House: The Ultimate Step by Step Blueprint” By Glenn Schworm
“Flipping houses for Dummies Cheat Sheet” By Ralph R. Roberts, Joseph Kraynak
“House Flipping for Beginners” By Dee Striker
Originally published November 8, 2016 — Updated November 1, 2018