How to Turn Your House Flipping Hobby into a Business

House flipping can be a lot of fun, and for some people, is an engaging hobby. If you’ve got an eye for design, seeing the beauty hidden in a ramshackle old house can give you a thrill! House flippers know how to take the mundane and broken down and turn it into something desirable and homey. However, house flipping isn’t just great for the sake of restoring old houses – it can be seriously profitable, too! If you’re ready to take your house-flipping side hustle or hobby and turn it into a full-time business, you’ll want to check out this handy guide.

house flipping
  • Think about funding sources. When you’re starting out, this is easily the most important and also the trickiest part of house flipping. Even the filthy old tear-down you’re planning on flipping is going to cost a sizeable chunk of money. Say you’re restoring an old house near Seattle (a fast-growing area, more on that in a minute!) and you need to put together the funds quickly.

    You could consider a stated income loan in Washington State, if you’re having trouble getting approved for a loan. Or, if you’re well connected with a group of fellow house-flippers, you could go in together on the cost of the house and renovations. It’s probably wisest to make sure you have enough saved up for a down-payment and also can get approved for a loan before signing any paperwork.
  • Know your market. This part requires research, research, research. You might purchase a house in a lower income neighborhood that is cheap and seems like a perfect flip. You pour 200k into renovations and remodels, and then realize that because the area is not desirable, you are unable to sell the house for more than the amount you paid for it plus the reno costs.

    It’s absolutely imperative that you know there will be demand for the house that you renovate. Make sure you’re looking into what neighborhoods, towns, or cities are growing. Now is a good time to flip older, historic houses in big cities, as many young people are moving into city centers for work and for the exciting social scenes there, for instance.
  • Make your business plan. Once you’ve sorted out your startup funding and have a good idea for the markets you’re trying to tap into, it’s time to solidify all that into a workable business plan. A business plan is essentially a 30 to 50 page outline of the way that you plan to finance, budget, and allocate funds in your business, how you plan to grow, an analysis of the market that you’re aiming at, and an assessment of the risks you’re likely to face and what you will do to mitigate them or face them when they arise. Having a solid business plan is key for getting more investors to take your business seriously.
  • Make yourself known. You don’t have to be the next HGTV star to be a successful flipper, but you should at least get your name out there in the communities you work for. This will benefit you, as the better known your flipping business is, the more likely people will pay top-dollar for your flipped houses. There are dozens of ways for small business owners to market themselves these days. You should definitely have a professional website, preferably one that is well-designed and intuitive.

    Having a poorly designed, clunky website may suggest to potential customers that you don’t know enough about design to restore a house well, so this should be a priority. If you’re using company-owned vehicles, like trucks or moving vans, you should definitely get your brand logo, phone number, and website emblazoned proudly on their sides and tailgates.
Flipping
  • Invest in quality. Real estate is full of people trying to make a quick buck, hoping for a rags-to-riches story. While sometimes this happens, much more often, people end up financially ruined and in debt after not covering their bases. If you’re careful about your growth model, make sure to secure funding from a sensible, preferably low-interest source, and do quality work on the houses you flip, you’ll be much more likely to succeed in the long-run. Waiting a while to see massive payouts may be hard, but it’s worth it to avoid the risk.

House flipping can be a fun and lucrative career ambition and small business model. Be sure that you start by thinking hard about these steps, and you’ll be well on your way!

About Mohit Tater

Mohit is the co-founder and editor of Entrepreneurship Life, a place where entrepreneurs, start-ups, and business owners can find wide ranging information, advice, resources, and tools for starting, running, and growing their businesses.

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