If you enjoy watching renovation shows or HGTV, you are most likely aware of the process of flipping houses.
If you aren't sure what this means, flipping a house is basically investing in a house, fixing it up as quickly as possible, and selling it to reap a profit. But, can you start flipping houses as a side hustle?
Research Flipping Houses
First things first, know what you are getting yourself into. Flipping houses can be a lot of work. While it can make a great side hustle, sometimes it's going to take working long hours on the weekends and after your full-time job.
You'll have to understand the ins and outs of real estate, understanding the costs and how things can add up, negotiation strategies, and more. Flipping houses isn't for the faint of heart, but knowing what you're getting yourself into can save headaches down the road.
Have Cash (or Know Someone Who Does)
If you're struggling to pay your bills or save money, flipping houses is not for you. In fact, I only recommend this side hustle if you can put some money upfront for a house and the repairs, or if you can find an investor willing to work with you.
If you choose the latter, make sure you have a contract in place and that everyone understands their roles and duties. Remember to talk profit percentages. Who gets what, and when? Whos job is it to sell the home? Asking questions like these will make sure everyone is on the same page.
If you choose to buy the homes yourself, understand that trying to finance a home for the purpose to flip requires jumping through a lot of hoops. It may be easier to pay for the home in cash and then getting a loan for the repairs (if needed).
If you're flipping houses a side hustle, it's important to hire help. It will be hard buying, renovating, and trying to sell a home all by yourself. Outsourcing certain jobs, like landscaping, roofing, etc can save you time and energy. Many people who flip homes as a side hustle generally work with a contractor, but that's a whole other story.
Once the home is ready to be sold, you can hire a real estate agent, or at least have someone come in and give you the renovated home's value and comps in the area.
Understand Taxes on Flipping Houses
A lot of house flippers talk about taxes, and you should be wary of them and understand them if you want to flip houses as a side hustle. Sometimes, you can get away with being taxed less. For example, if you work a full-time job, flipping a home may not be considered as part of your regular income. Also, after doing some research, I've found that some people "hold" their flipped properties to save on taxes.
It's important to know the local, state, and federal laws in your area when flipping houses. Take the time to read through each piece of info. Ask lawyers and tax professionals the questions you need to. Take the time to understand the tax information now, so you aren't regretting it later.
Know Your Timeframes
You have to understand that being a part-time house flipper isn't going to be as quick and easy as doing it full time. You won't be able to flip a home in 3 weeks, no matter how hard you try. Instead, set reasonable deadlines. If you are working with a contractor or any hired help, make sure they have reasonable deadlines as well.
If you have to, set up a schedule based on when things need to be accomplished. But, don't beat yourself up if things don't go according to plan. Renovating a home takes time. A lot of time. Even the most experienced flippers come across things that take longer than expected. So just be aware of what's going on.
Don't Base Changes On Emotions
Always remember that if you are flipping a home to sell, you are NOT the homeowner. You're an investor. Don't choose a paint color because it makes you feel good. Choose a neutral color that will suck in possible buyers. Don't renovate the bathroom to look like yours. Renovate the bathroom to fit what a buyer would want.
By taking your emotions out of the equation, you'll be able to flip houses much more quickly and easily, plus you'll save yourself some headache on trying to reason with a buyer on why you choose hot pink carpet.
Flipping homes can be a lucrative, time-consuming, and even fun side hustle. These are just a few tips to start you off on what may because one of the best side hustles you've ever done.