If you watch our show, Flip or Flop, you know that my husband, Tarek, and I have been around the block when it comes to rehabbing and flipping houses. We’ve seen the worst of the worst, gone over budget and over deadline, and we’ve somehow still come out ahead.
I was talking to Tarek the other day about what’s really kept us ahead of the curve with our business, and it really comes down to following a few simple rules of house flipping. If you’re thinking about getting into house flipping, I definitely recommend keeping these 10 rules in mind. They’ve helped out Tarek and me more times than I can count over the past few years!
1. Always keep your lead funnel full
When you keep your lead funnel full, you’ll always have something to go back to if a deal goes south. Basically, you never know if you’re going to have a house to flip until you walk away from the closing table or get the winning bid at auction. Plus, you always want to have leads to follow up on when you’re ready to buy a new flip.
2. The neighborhood is as important as the property
No matter how amazing a deal you’ve found, if the neighborhood is in decline, it’s probably not going to be a good flip. Look for flips in neighborhoods that are growing.
3. A big rehab job isn’t bad news
Walking into a house that’s totally trashed can be scary, but remember that big rehab jobs usually mean you can get the house for a really low price. If you know what you can do yourself and you have a good relationship with a general contractor, your biggest rehabs could get you your biggest profits.
4. Don’t forget — it’s not your house
When you start designing your rehabs, don’t fall in love with them. It’s not your house, and if you make it too personal, it won’t sell. You’re designing it for potential buyers, not yourself.
5. Go with updated trends but avoid fads
Waterfall showerheads, stainless steel appliances, and accent tiles are all updated details that have a modern flair, but they all also have a timeless look to them. For example, Benjamin Moore has announced that “Simply White” is the color of the year for 2016, so why not add some beautiful white accents, trim, and cabinets? They’ll be trending next year, and they also won’t go out of style any time soon.
6. Kitchens and bathrooms sell houses
When deciding where to spend your money on your rehabs, always focus on the kitchen and bathrooms first. They’re the most important rooms in the house, and buyers always look to them when deciding whether to make an offer.
7. Don’t over-rehab
Spending too much on rehabbing can leave you with a $500,000 house in a $350,000 neighborhood. Tarek and I have been there, and it’s a real nightmare. Don’t spend so much on your rehab that you have to ask more than the local market value for your house.
8. Professional staging can sell a house
When I look back at houses we’ve had staged and the houses we’ve shown without staging, the difference is incredible. Professional stagers know how to put in just the right furniture and decor to make buyers really see themselves living there. Staging is almost always worth the price.
9. Marketing is essential
Sending out mailers to motivated sellers, putting up “bandit” signs in neighborhoods where you want to flip, maintaining an active social media presence, keeping up with your blog … it’s all important. Marketing will get you more leads, more deals, and more sales.
10. It’s not over till you close
Finally, don’t start celebrating just because you got an offer on your house. We’ve had banks turn down buyers’ loans after getting an appraisal. We’ve had buyers back out of contracts at the last minute. You haven’t flipped your house until you leave the closing table with money in hand.
There you go. Follow these 10 simple rules, and you could be running a successful house-flipping business in no time. Good luck!