3 tips before you flip

Television shows like HGTV’s Flip or Flop make flipping a house seem so easy.

Based on the show, it’s simple. Buy a rundown house with great bones, do some painting and renovations and spruce up the landscaping. Sell the property after six to eight weeks skip to the bank with a big fat check.

According to ATTOM Data Solutions U.S. Home Flipping report, 207,088 single family homes and condos were flipped in 2017. With the average gross flipping profit at $68,143, it’s no wonder consumers want to get into the real estate flipping game.

But here’s the reality. It is a business.

That means you need to do your research, have a strategy and be prepared to invest a lot of time and money. This is not a get-rich-quick scenario. Experts say it can take months to find the right property. Once you buy the house, until it’s sold, time is literally money being spent. And you may not see that high a return on your investment.

Here are three things to consider before jumping into the house flipping market.

It takes a team: You may think you can handle it on your own, but you need a team of experts including realtors, contractors, subcontractors, accountants, lawyers and home inspectors. Unless you have the construction, contracting or real estate expertise and background, going it alone is a bad idea.

Have a plan: How are you paying for this? How much will you spend? How will you buy the home, with cash, financing or will you team up with an investor? What about utilities, property taxes and other extra expenses? Experts say your buying price matters. Before putting in your offer, your calculations should include renovation costs, permits and an allowance for things that may go wrong, plus the exact price the house will sell for. From there, you will know just how much to offer the seller to maximize your profit. Pay too much for the house, and you just spent all your profits.

Research: Location, location, location. Where you buy is as important as what you’re buying. Look into the neighborhood and surrounding areas. For the house itself, think cosmetic changes and be aware of what comparable houses in the area selling for. Unless you are an experienced contractor, you do not want to buy a house that needs major work. If it needs a new roof, has issues with the air-conditioning/heating, electrical or plumbing systems, your best bet is to walk away.