Do You Have the Personality It Takes to Be a House Flipper?
You’ve seen the reality shows, and probably thought you have what it takes to quit your day job and start flipping houses, but do you? Companies throughout the housing industry, including Home Depot, along with mortgage companies and lenders say they’re seeing an uptick in millennials buying fixer-uppers for themselves or to flip. It’s a healthy trend with the potential for huge profits, but it’s not without its risks.
via Matthew Hurst
Brian Augsberger, a Rehab Financial lender who provides rehab loans in fifteen states across the US, said “not everyone is cut out to be a house flipper. Rehab Financial makes secured first lien loans to real estate investors requiring capital to acquire, improve, own, operate, manage and sell non-owner occupied 1-4 family residential properties. They see a lot of people investing in real estate, and a lot of people wanting to flip homes.
“They want to quit their 9-to-5 job and start rehabbing houses,” he said of some millennials. “I advise them to make their first flip a side-project. Buy the property then spend your time after work and on weekends fixing it up. Don’t quit your day job until you know if this is something you really want to do.”
You can definitely make good money flipping houses if you know what you’re doing, how to do it, and you make smart decisions. Augsberger urges caution among first-time investors of any age because he talks to too many people who think flipping a house is as easy as it looks on television. “People watch these television shows, and they see the pros to fixing up an old house and selling for a lot of money. What they don’t see is all the hard work that really goes into getting the home ready for sale.”
Successful house flipping involves more than just getting a loan. “Do your due diligence,” he said. “There are thousands of good articles on the Internet you can read about flipping houses. Know what you’re getting into. I think a lot of the reality shows about house flipping don’t show the cons of flipping as much as they show the advantages.”
The kind of personality you have, rather than the depth of your pocketbook that determines how successful you will be on your journey. Augsberger goes on to say, “You have to be able to talk to and relate to a lot of different people. You’re going to be dealing with attorneys, plumbers, contractors, painters, lenders, all kinds of people. You have to be able to communicate what you need and hear what they need from you. If you communicate well, for instance, you might be able to save yourself hundreds, or even thousands of dollars by getting a contractor to only come out once to your property rather than a few times.”
Personality Traits House Flipping Experts Have
There are a lot of traits first-time DIY’ers must have:
Aside from everything else, being organized and detail-oriented helps a lot when managing a big project as such.As mentioned above, you have to coordinate with a lot of different people in order to get things done. “What are your organizational skills like?” Augsberger asked. “Communicating is important, but so is being able to schedule things, pay attention to details, and make things happen. You’re the boss now. It’s up to you.”
It takes a lot of discipline to consistently show up and do the kind of dirty grunt work no one else wants to take on. If you can’t hire someone to do it, it’s up to you to figure out how something is going to get done.
Practical and business-oriented
Too many investors fall in love with their first flip and put more time, effort, and money into it than they’ll ever get out of it. “Do your due diligence and know what you can get out of it for what you put into it,” Augsberger said.
Humble and realistic
Watching a project or lesson in how to install cabinets is a lot different than actually installing cabinets for the first time. Don’t overestimate your skills. Be ready, willing and able to call in the pros when you’re over your head. Too many people become stubborn, insisting on “doing it themselves,” to save face and look like an expert when the best thing they could do is hand it over to an expert.
Be open to advice and feedback
Unless you’ve already successfully flipped a dozen houses or more, don’t be a know-it all. Be open and willing to listen to what the pros tell you about your house. This can be anything from whether the home is a disaster, to if the area is or isn’t likely to be a good choice. You can always say no later, but you must be open to ideas, suggestions, and feedback before you reject advice outright.
“The main goal is to make money and increase your profit margin,” Egypt Sherrod, tells her followers. Sherrod is a realtor and a property renovation expert from Flipping Virgins, an HGTV reality show for first time, Do-It-Yourself house renovators. She says don’t get distracted by shiny, higher priced items than your budget allows. Create a budget and stick with it.
You don’t have to be crazy, but you do need to be something of a gambler, and willing to take some risks and move out of your comfort zone – a lot. You also need to be able to flex, change directions, and give up or take on more than you expected.
Are you unwilling to take “no” for an answer? You’ll need to have strong boundaries because you’ll encounter a lot of opposition, reluctance, and doubts from those who don’t think you’re capable. “You need to be able to go after what you want,” Augsberger said. “If it’s your dream, go for it.”