- Hey, it's Nolan Matthias,
and welcome back to the channel.
Today we are talking seven tips for home flippers,
what you should do, what you shouldn't do
and things that'll make your life
as a home flipper, a heck of a lot easier.
But before we get into it, do me that favor,
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So questions about flipping anything you like,
so let's get into it, let's talk about home flipping.
Now tip number one is buy in communities with high turnover.
So what we don't wanna do is buy in communities
that have five, 10, 15 months
worth of inventory on the market.
What we wanna do is find properties
that have two or three months worth of inventory,
that have high turnover, lots of listings,
and lots of people that want to be in that area
because in demand areas are ideal for flipping houses.
If you can take an old property, make it new again,
and do it in an area that has
a ton of people that wanna live in it,
you will be basically rolling in dough
after you finished your flips.
Tip number two, sticking with that community theme,
is to get to know the communities that you wanna flip in.
So the ones that you would like to spend time in,
the ones that you would like to sell properties in
and basically buy properties in,
and the ones where you would like to get to know the market.
Now, obviously don't pick communities that are crappy,
pick ones that have that first piece of criteria,
which is they have high turnover,
but pick ones that are also desirable
and places where you would wanna live.
Because when you're flipping properties,
if you can purchase a property
that you would actually wanna live in
and build it to the spec that you would wanna live in,
then people like you, are also going to gravitate
towards the properties that you've flipped
and be better buyers as a result.
So basically, flip properties
that people like you would wanna live in.
Note, that being said, don't get stuck
on individual communities either,
because good deals will show up in different places.
And often flipping is all about finding a good deal
and taking advantage of it regardless of where it is,
because it's a good deal and a good opportunity.
And what you've gotta get really good at,
is finding those opportunities and making sure
that you can take that property,
do a renovation and turn it over for a profit
or be able to refinance it and hold it longterm.
Tip number three, is that you make money
on the buy-side of these real estate transactions.
So you wanna find properties that are really good deals
and places where you find really good deals,
is getting to know the community, going door to door,
finding people that may wanna sell
in the next two to three years and getting them
to recognize you and for you to recognize them.
You can also look at foreclosures and the way you do that,
is by asking for a realtor to set you up
on a foreclosure search.
Or, you can deal with what's called wholesalers.
So these are people who go out and work communities,
try to find great deals and then flip them to flippers,
sell them to flippers, so that basically,
they make a small piece, without having to do the work.
And these guys seem to be really good
at finding really great deals.
Now, the thing you have to make sure that you watch out for,
is that when you're dealing with a wholesaler,
is that you are as well-informed as that wholesaler is,
and that they aren't going to take advantage of you
and try to sell you a property
for more than what it's worth.
Tip number four, is to know your competition.
So what you wanna know is, you wanna know
what's available for sale.
So what you're going to be competing against,
once you actually flip the property,
once you do your renovation.
You also wanna know what sold previously.
These are your comparables.
So these are the properties that have already been flipped,
already been renovated and what they've sold for,
because those will be what establishes the price,
in the particular community that you're in.
And then you also wanna know what hasn't sold,
so the listings that have been terminated,
and the best way to do this,
is to get the terminations list from your realtor,
find out the properties in the community that haven't sold,
and then maybe reach out to the realtors
that have those properties listed.
Or you could even go so far as to knock on the door
of those properties and see if you can figure out
why those properties didn't sell.
And these are gonna be your canary in the coal mine.
So knowing why those properties didn't sell,
is gonna give you a really good indication
of that community and what you have to do
to not make any mistakes,
when you're flipping your property.
Tip number five, is to establish a really amazing team.
And what you're gonna wanna have on that team,
is realtors, multiple realtors.
You don't wanna deal with just one
when you're flipping properties.
In fact, in a lot of cases what you wanna do,
is you wanna find the community specialists
that know the communities
that you wanna flip in the best,
and you wanna get them to all set you up
on searches and help you find great deals.
A lot of the time, the realtors will be able
to find properties and find deals,
before you even see them, before they hit the market.
And it's just as much a benefit for the realtor
to have a buyer in their pocket,
as it is for them to have a listing in their pocket.
And if they can take the two of you
and match you with a potential seller
and give you an opportunity to make a flip
as a result, that's a win-win for them
and it's a win-win for their seller.
And of course, it's a win-win for you.
Now on your team, you'll also wanna have
capable mortgage brokers and financers.
So people who could provide the funds
that you're going to need to do the flipping.
You're obviously gonna wanna have a great renovator.
You may wanna have a great appraiser,
to help you assess the properties.
And if you're purchasing and flipping to hold,
you're probably gonna wanna
have a great property manager as well.
And if you've got a team like that set up,
you're gonna have a far better time flipping properties,
than if you try to do everything on your own.
A good friend of mine, who's a firefighter
once told me, you don't wanna have a truck
that's a tanker and a ladder,
because it does neither of those things well.
If you try to do everything on your own,
you're gonna be one of those individuals
who does everything okay, but nothing really, really well.
What you wanna do, is focus on the piece
that you do really well and find other people
who do other things really, really well,
to build out your team.
You want experts in each area,
so that you don't make mistakes.
Now tip number six, is know your exit strategy.
So what are you gonna do
with the property, once it's renovated?
Are you going to sell it?
And are you gonna sell it through
maybe a realtor, or are you gonna sell it
through a company like Bode,
who will give you all the information you need to sell it
and maybe do it for a little bit cheaper?
Or are you gonna go for sale by owner?
I don't recommend for sale by owner, but hey,
what's your exit strategy gonna be on the sell side?
Or maybe you're gonna keep it.
Maybe you're gonna hold the property
'cause you built up a bunch of equity in it.
And then what's your strategy going to be
to refinance that property,
in order to get your money back out.
Having your exit strategy set up
before you go into the flip, is hugely important.
And then not only having an exit strategy,
but having a backup plan,
and a backup plan to the backup plan, is also important.
So for example, we bought a property recently.
Our plan is to hold it long-term, but if we can't do that,
our backup plan is to flip it and sell it.
And either way we're happy,
but we know what our plan is and what
our desired exit strategy is.
That also helps with the renovation
because it dictates what we're gonna do to the property,
you know, and what we do to the property
might be different if we're renovating it to keep it,
than what we might do if we were renovating it to sell it.
So tip number seven and our last
and final tip, is don't over leverage.
We see this far too often with real estate investors.
They wanna go borrow all the money, do all the things.
And ultimately, they end up holding multiple properties
with more loans than what the properties are worth,
and it gets them in trouble.
So the less leverage you can use, the better.
So we highly recommend if you're gonna do flip,
staying underneath that 70% loan to value number
and really trying to keep as little mortgage as possible
and as little financing as possible
on these properties, in case something goes wrong.
So if you found this video useful, do me that favor,
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And if you have any questions, leave them in the comments
and we'll see you on our very next video.