3 Tips for Making Money Flipping Houses

Currently, the national housing inventory is incredibly low, even lower than it was last year. New construction simply isn’t keeping pace with demand, especially at the lower end of the market where builders are choosing to put up new apartments rather than affordable single-family homes. This means that home prices are continuing to rise, but it also means that finding a good house to flip and make a tidy profit on is getting harder and harder.

In such a competitive landscape where perhaps dozens of house flippers all go after the same investment property, here are three house flipping tips to help you rise above the crowd make more money on your rehabs this year.

• Expand your search.

Especially when first starting out, many house flippers limit their search for ideal investment properties to their local area. This makes it easier to oversee the flip, easier to work with local crews that you know and trust, and generally makes the whole process simpler.

But if you have some experience in this business and have built a strong network, it may be time to start looking past your backyard. The potential profits to be made flipping houses vary from neighborhood to neighborhood, county to county, and state to state. The bigger net you can cast, the more money you stand to make.

Just make sure that you know what you’re doing. Don’t spread yourself too thin by managing flips in too many different areas unless you have a solid team that you can trust to get the work done without you watching over every last detail.

• Utilize outside funding.

House flipping loans can make your flipping career more profitable in a number of ways. First, getting outside funding from a private money lender will let you invest in higher-end properties where you could potentially earn gross ROIs in excess of $100,000.

Second, outside funding can help you invest in more properties at the same time, potentially doubling or tripling your annual earnings.

And third, outside funding can make your bids more competitive, helping you beat out other house flippers. If you have a letter of intent that shows you’ll be able to pay cash for an investment property, that will make you a very desirable buyer.

• Invest in marketing.

In order to find the best properties to flip, you’ll need to make some upfront investments. Your marketing plan might include targeted direct mailers, which usually involves hiring someone to design a great postcard or letter and buying the list of people you want to send it to. You could also invest in a thoughtful, informative website that helps sellers understand why they might want to work with you.

You might also invest in tickets to conferences or events that will give you the opportunity to network with other house flippers, contractors, real estate agents, or wholesalers. These sorts of relationships can lead to valuable referrals and can make your job much easier.

Whatever your strategy, we hope you have a productive and lucrative year of rehabbing!