Real estate investors find flipping houses very profitable. In this “How To Flip A House For Beginners” blog we explain how this popular real estate technique can lead to more commissions.
Double Commissions: Earn a commission selling a house to a flipper and earn another commission when the flipper sells the rehab house.
Here’s some tips to help real estate agents build a niche in flipping houses.
How To Flip A House Starts With Educating Yourself
Like any specialty, you need to educate yourself about the nuances of house flipping for profit. Otherwise, you can’t help investors with finding the ideal houses to buy, fix and flip.
Bigger Pockets sells an e-book about flipping houses published in 2019. Here Their digital book authored by an experienced fix-and-flip expert explains the details for finding suitable houses, getting financing, estimating rehab costs, finding and hiring the best contractors, and selling at the highest price.
Bigger Pockets also offers 11 Free articles on flipping houses including useful tips like the pros and cons of house flipping. Here
Go to a website providing Free resources to learn how to flip houses and make a profit. This website contains Free articles and podcasts teaching:
- Basics of house flipping;
- How to analyze flip deals;
- How to build a house flipping team;
- Sample contracts for hiring contractors;
- Accounting and record keeping systems;
- Finding financing;
- Leveraging the MLS;
- Purchase contracts and contingencies
- How to rehab houses; and
- How to market and sell rehab houses.
Also, join Free forums dedicated to flipping houses like the one Bigger Pockets offers. Here
Figuring Out Funding
Successful house flipping agents know how to get funding.
Besides learning about the many options for funding house flipping by reading some of the articles mentioned above, network with private and financial institution lenders to recommend to your clients.
Hard money lenders exist across America for house flippers. Bigger Pockets provides a list to contact hard money lenders across the U.S. (and by state). Here
The best way to serve your fix and flip clients is to find them good leads. Not easy to do but contacting owners of run down houses often lead to new listings.
Driving around your area looking at run-down homes to approach for a listing saves your clients much time. That’s why they will want to work with you and not another agent.
Just finding run down homes doesn’t turn into a listing and a fast sale to your house flippers. That’s because house flippers must analyze which ones contain the potential for large profits.
Learning how to quickly analyze a rundown home to see if it qualifies as a money maker to your house flipping clients provides them with a great service. You save them time and offer them fixers with the best profits. That’s the secret for successful house flipping agents.
You need to understand what your clients look for. What is each one’s Return On Investment (ROI) ratio? Once you know your clients’ ROI ratio, you will know their Maximum Allowable Offer (MAO) or the maximum amount of money your clients want to pay for a fixer-upper. Ask your clients these two questions:
- How much your client wants to pay?; and
- How much profit your client wants to make?
For example, a client only wants to pay $100,000 to buy a house and desires to make at least $50,000 profit after the rehab and sale. By knowing how to estimate rehab costs you find a $100,000 fixer, estimate $25,000 rehab costs and know that the market price is $250,000. You factor in your commission and closing costs to present a fixer-upper with the potential to make over $100,000 profit.
Know Why House Flippers Want to Work with Real Estate Agents
Many online articles and blog posts assist house flippers as mentioned above. But, some also tell them about real estate agents who help them the most.
Some offer flippers tips on the best real estate agents to help them become successful. These tips include:
Agents Understanding the Local Housing Market
An experienced local agent helps house flippers decide if this area makes a smart investment.
Flippers from outside of the neighborhood rely on local agents to advise them. If the current market conditions are ripe for big profits or not.
Even if ripe today, what future events or trends may affect the current market when the rehab completes in six months?
Therefore, know your community to advise your potential flipper clients about current and future market conditions.
Besides the condition of the house, a good agent assesses the neighborhood. Is the house in an up and coming neighborhood or will home values decline?
Scouting the Right Rehab Projects
A good agent helps the flipper find the right as-is house to buy within the flipper’s budget.
An agent who knows how to estimate rehab project costs along with market conditions can earn large profits for the flipper.
A good house flipper agent knows that sellers of a rundown house may accept a bargain price (for the flipper) and if it is in good enough shape that the flipper can afford to fix it for a profit.
To Flip Houses You Will Have To Finding Good Contractors
Renovations can become too costly without tight controls.
A good house flipping agent knows professional reliable contractors who charge reasonable rates.
They know that general contractors differ from crafts persons who specialize in specific rehab tasks like roofing, chimneys, landscaping, outdoor projects, garages, and basements.
A smart house flipping agent knows the right “look” a house needs to sell at top dollar.
Moreover, keeping costs down to create that “look” makes the difference between big profits and small ones.
Bringing the Right Buyers
The sales price determines whether the flipper gains enough profit to make the rehab project worthwhile.
An agent experienced with flipping sets the right listing price.
Knowing the flipper wants to sell quickly before moving onto the next fix and flip project.
A smart flipper agent knows how to find “qualified” buyers with a “pre-approved” lender’s letter rather than ones with no letter or just a “pre-qualified” lender’s letter. This prevents closing delays that flippers dislike.
Saving Time and Setting the Best Listing Price
An experienced agent knows the right time to sell based on current and future market predictions.
A smart agent advises the flipper client to wait a few months because an upcoming event may upgrade the entire neighborhood to sell for a bigger profit.
House flippers look for smart agents who save them time and make them money.
How To Flip A House For Beginners – Conclusion
How to become a house flipping agent involves:
- Understanding funding;
- Finding deals;
- Analyzing deals; and
- Knowing why flippers want to work with agents.
Want to Learn About More Real Estate Agent Niches?
Besides becoming a house flip agent our posts here teach you other niches like:
- How to become a real estate Investor’s Agent. Here
- How to specialize in Selling Foreclosures. Here
- Double your Commissions with 1031 Exchanges. Here
- Earn Big Commissions Selling Franchises. Here
- “How to become a Probate Real Estate Agent. Here
When You Start to Earn More Commissions Keep More for Yourself
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- Completely transparent 100% Commissions plans;
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- Free Concierge services.
Steven Rich, MBA – Guest Blogger
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