DC Fawcett tips for - How to Get Started in Real Estate Investing Flipping Houses

Although the so-called gurus might make you believe that real estate investing is an easy money career, it is, in fact, a hazardous business if you use your own cash or credit and requires proper planning avoid losing any money. If you don’t know what you are doing, you’re going to lose your investment. DC Fawcett says that However, like every business, virtual real estate investing has the potential to grow, but many new real estate agents don’t make it, though, usually because they treat it as a hobby instead of as a profession.

Instead of talking about real estate investing in general, in this article, we are going to focus on how to get started in real estate investing by Flipping houses but before we talk about techniques to ensure you get success as a newbie in real estate, let’s find out what exactly Filliping houses means?

What Does House Flipping Mean?

Flipping Houses is a business strategy that real estate investors use to earn profits within a margin of days to months. Usually, they buy a cheap but potential property, renovate and resell it for some profit. Although there is tremendous potential to make a lot of money filliping houses, it is also possible to have losses on your investment when rehabbing which is why it’s important to not use your own cash or credit to flip houses.

Getting Started in Real Estate Investing Flipping Houses

Honestly, the best way to become an expert at house flipping is just to do it; make mistakes and learn from your mistakes. However, you can reduce the risk factor by following few steps given below while you are just getting started in real estate.

1. Analyze your Financial Situation

Like every other business in the world, Real Estate, especially flipping houses require a good amount of cash first to buy cheap houses and apartments and then renovating them to resell for some profits. Analyzing your financial situation will help you reduce the risk factor of the business. You can invest your money (NOT Recommended), partner up with someone or take a loan from a private lender (private individual that lends money on real estate).

2. Find a GOOD house to flip

Flipping is not about just buying a house, renovating it and reselling. It requires a hell lot of research to find an excellent property that has the potential to earn you some profits. Imagine buying a house for 300K investing another 100K on it and when then no one buys it because of the neighborhood?

Although it is necessary to buy a cheap house, it is more important that you consider factors such as location, good schools in region, value of the home. Moreover, you also need to make sure the house is in sound condition. I mean you don’t want a house that all you can do is tearing it down and rebuild it (unless you’re in a neighborhood that warrants that). You need to find a house that needs renovation.

3. Do some Math to find out After Repair Value

Doing some math before making an offer to buy the house is very critical. You need to find the after repair value (AVR) to determine your profits. AVR is the estimated value of the home after buying and renovating it.

You can subtract your expenses of buying and renovation from after repair value to determine your profits. Even though it is just the estimate, you will get the projection of the benefits early.

4. Personally Supervise Rehabilitation of The House

Although you would need to hire a professional contractor for rehabilitation and renovation before flipping houses, it is critical you or your partner supervise everything personally. It makes it important that the house you are flipping is closer to your residence because you need to go there often to make sure everything is going as expected. This is why it’s critical to have a partner when rehabbing in virtual markets.

5. Race against the Clock

Flipping houses is a race against the time. The longer it takes to renovate the house, the more money you need to invest. Even after renovation, if it is sitting there, you need to pay for utilities. Try to do the whole processes of buying and renovating to reselling as soon as possible to increase the profits. Use the Virtual Rehabbing Process to Leverage Your Time.

A know-How for flipping houses? by Dc Fawcett

The internet is abundant with puzzle pieces about flipping houses: Here are few words that form the puzzle in real estate scenario:

• ARV
• Staging
• Hard Money
• Contractors

The above words listed in bullets are pieces to the house flipping puzzle, and those pieces are highly important. However, If one is new to flipping of houses. These small pieces of information can appear like some jigsaw puzzle. That amounts to 1000 pieces which have to be assembled together.

An expert in flipping houses would not want anybody to look at flipping houses with the same hatred as looking at puzzles.

1. Stay committed to the flip:

The initial step in any real estate venture is to stay committed. Abundant number of people would like to get into flipping of the houses.  Or they may desire being landlords, and get really excited about the very idea of becoming a landlord.  Flipping of houses is not just a hobby; it is a business that can influence your future in the economic scenario.  Be decisive that you are going to do the flipping.  Also, decide on learning everything inside out.  Only then, one should move on to the step two.

2. Have a sound knowledge on flipping houses:

Education is pursuit for the lifetime.  Before, one takes up flipping of houses. One should be well-educated regarding the concept.  Of course, it is not recommended to go to some class for an exorbitant amount of money. The only suggestion is that one educates himself well and be keen to learn the basics of the trade. Start teaching everybody with what you know, because that is the best way to digesting what you have learnt?. Do not just skim through the surface – try to go in and make out how it works.

3. Have a sound knowledge on the flipping mathematics

When proper calculation is not done to a flip. You will not possibly get the exact amount of money coming out of it. In a successful flip,understanding the appropriate math is the most important feature.

4. Research of the market:

Most importantly, you will need to observe the market and decide on the appropriate place to flip.  In some vicinity, $200,000 for a home would be deadly cheap, whereas in yet other areas the $200,000 would be a very exorbitant amount. Each and every market is different, so one requires sound knowledge on the market that one flips into  Raise. These below mentioned questions to yourself:

• Rate of average house go for?
• How much does a bank REO go for?
• Speedily are the properties being sold?
• What are the places which sell speedily?
• What types of property, size, and layouts are selling speedily?

Do a thorough study of making out and honing in on the local market. Just have a walk through the open houses, and have a meeting with local experts to make out the state of local finances.

5. Arrange for the Flip Financing:

At this juncture, one might be excited enough to begin.  But before that, you need to raise a basic question to yourself:

In what mode you are going to pay for the flip?

There are many different strategies you can exploit to put finances into the next flip. Here are a few of the viable methods:

• Everything as cash 

If one has the cash in the bank, one can simply write the check.  This might be the easiest way, but for majority of the people, it is not the best option.

• Partners/Private Money

If there are people who can lend money, they may be drawn to partnering or lending money at a certain rate of interest.  Money that is private can be affordable, although getting to have private money can be arduous and legally difficult.

Flipping houses – Is it as easy as it appears? by Dc Fawcett 

One might have come across advertisements showing how making money through real estate is a very easy task.  One might also have come heard seminars in radio which guarantee flipping of houses without one’s own money.  Also, there are sponsored posts in the Facebook which say that it is very easy to flip house with no money at all. DC Fawcett says  When one comes across the word ‘Easy’, one needs to be very cautious.  One who is well-versed in realty might know that real estate is not that easy as one thinks.  As a matter of fact, if one has to become wealthy, and successful, it is not an easy task.

One might have acquired millions of dollars, but it demands work to manage the wealth and retain it.  That is the reason why majority of people who acquire huge wealth turn bankrupt in a matter of years.  One might be waiting for the easy way to succeed, but you will just keep waiting for a long time to achieve the success.  Investing in real estate provides wonderful opportunities for people to acquire wealth, but it is not an easy task.

Variety of real estate investing techniques – How easy is it to make money - DC Fawcett

There are umpteen ways to make money in real estate.  There are some very easy methods to put money into real estate, but those methods will not make one rich.  They can give you a decent value in return for the money that is already saved.

• Real Estate Crowd Funding:

One of the most noted ways to invest is through crowd funding.  One can put in small amounts of money via crowd funding companies.  These companies then pool the money with other investors to make a larger investment.  This investment changes hands to flippers or other developers in real estate.  One may be able to get huge amount with crowd funding, but there would be a lot of money to get affluent via that return.  For those who are starting up, crowd funding can be comparatively easy.

• Putting money into REIT:

There are the turn-key rental properties.  These are rentals that can be purchased and are already rehabbed, managed and rented by a property manager.  These are particularly situated in high cash flowing areas and demand less work.  However, there are difficulties with occupants, repairs and bad turn-key companies.  One might own a turnkey property. Purchasing a turnkey property could be easy, but one should be intelligent enough in selecting the company.

• Being partner with other real estate investors:

Yet another option to put money into real estate is to partner with active investor.  One among the partners may lend money for a particular deal, while the other partner fixes the deal, completes the rehab and disposes the property.  One could lend money or retain equity position also. Partnering can be an easy way to put money if one is just into providing the money.  One has to be discreet enough in choosing the right partner and the appropriate properties to lend on.

House Flipping In Real Estate - By DC Fawcett 

Dc Fawcett Real Estate Tips

Money earned by means of real estate flipping houses drastically changes everyone’s lives. For some, it is their profession and for others, it is a hobby. However, if you are making your career in this endeavor, it is the surest way of earning a steady income. A person can earn without going anywhere near the office or industrial park. Even if a person works for the entire month, their income does not match with real estate income. DC Fawcett warns against the bad investment or money invested in wrong areas which results in huge losses.

Mistakes made when flipping a house

Paying more than actual price

The purpose for doing house flipping business is to make profits. However, when you pay more than the actual price and fail to negotiate, at the time of buying it, the profit reduces when you sell them. To turn it into real profit, one needs to study the real estate market. A lot of research has to be made before buying the property such as comparing at what price your neighbor had brought.

Excess Investment

Another common misstate is investing too much money for personal finances. Even if the property is purchased at the said price, you lose out on your savings. Instead of that if you go for loans, there person need not repay the entire amount in one go.Down payment assistance program.

Incorrect cost estimation

After getting financial assistance, make sure that project lasts long as you would need a good budget to cover for the renovations and little left over for contingencies.

Leaving important upgrades

There is a saying that one should be shrewd with respect to money matters. However, keeping this thing in mind, people tend to go in for cheaper options, though certain upgrades cannot be ignored. The buyers focus on kitchen, bathroom and master suite. At the most, you can reduce the cost on stops on these rooms.

Neighborhood Ignorance

Neighborhood awareness plays a very important role in house flipping. If your house is surrounded with ugly houses & surroundings, flipping becomes difficult.

Getting into the deal without house flipping team – Though, it is possible to do it independently, having a team is even better to guide you when you are new in this line. You can trust

•    Real estate attorneys
•    Certified public accountants
•    General Contractors
•    Real estate agents
•    Lenders

Fear due to bad experiences in this endeavor

Many fear to go from house flipping either due to bad experience because of becoming a scam victim or getting nervous at the time of purchase. However, one should overcome the fear and change their mindset.

Poor planning

Though you get innovative things in your mind, you need to chalk out the plan and get ideas about different types of renovations, budget and schedule. Lack of planning postpones the renovation which makes you lose more money.

There are many more mistakes that are being committed which when mentioned becomes a long essay.

Mistakes that new house flippers do and what they should know:

When you involve in flipping house real estate property you purchase it for a low price and then eventually resell the property for a higher price. DC Fawcett says This is done within a short tenure. While in some instances you enhance the house you may also leave the property as it is in other instances. In the second case another investor gets interest in the property.

Property flipping is a famous practice in the world of real estate. Flipping should be carried out in an ethical and legal manner and all the representations of the house condition should be correct. The value of the property should also be accurate.

Now let’s go over certain aspects of flipping:

• At the initial stages of flipping several flippers doesn’t have sufficient knowledge about the cost it takes to renovate a house. So they budget an amount that may not be correct. The problem is estimating repair costs in the most correct manner.

• Repair costs may spring suddenly when you have started to renovate the house and you have to contemplate upon the hidden repairs in the initial stage itself.

• You would have spent lot of time in flipping and would have expended a huge sum. So it is natural that you desire to sell of your property in a swift manner.

• You may think that through flipping is a get-rick-fast method. But you have cognizant of the fact that similar to other type of long-term investment it requires perseverance.

• Sometimes several house flippers will associate with another investor while in the process of flipping houses. It may be that while one investor deals with the cash transactions including paying the sum, another one will scout for the deals. In fact, the second person will be carrying out maximum work. Partnering can be a viable option if there is clarity of job and written agreement is available. Why do real estate investors endeavor in partnering? This they do so to share the risk. Having said that, it is not wise to enter into partnership on a real estate deal. When the partners have well-defined roles then this can be considered.

• One should get the help of the right contractor while flipping. See to it that the contractors don’t raise prices, get the help of wrong individuals etc.

• We should supervise the contractors and see that they are efficient and working in the limit of the budget. Ensure that you keep a watch on them in a thorough manner and before paying them more money see to it that they have done the previous work correctly.

There was a time when there was no problem with the legality of flipping. House flippers were in a position to make lot of money finding property bargains and also taking them to the notice of prospective buyers. Owing to the usual stagnancy of the market certain individuals made huge sum flipping properties. Then the home market value started rising in a sudden manner and wrong people entered into real estate field.

DC Fawcett Guide On How To Rehab  A House Easily:

Rehabbing a house is not an easy task and if you have decided to do it on your own then you need a guidance of an expert! Here is a set of guidelines by DC Fawcett, a real estate expert and a successful rehabber!

You can rehab a house either by yourself or by hiring a contractor. Before starting the rehabbing process, set a reasonable goal and know why you are doing the job and whether it is under your budget. House rehabbing is little bit tedious job to do but with proper guidance of rehab and real estate expert it is not going to be a great deal.

DC Fawcett, being a real estate guru, he has flipped hundreds of houses and dealt with lot of house rehabbing. He has done rehabbing himself and also by hiring contractor, hence he knows the pros and cons of both the ways.

Possible reason behind house rehabbing

There are many reasons for house rehabbing process.

• ·         Flipping a house which needs rehabbing
• ·         Buying a rental property and rehabbing it for proper accommodation
• ·         Rehabbing the house for your personal accommodation

While doing house flipping, if you have bought an old house to flip, then you need an expert’s assistance to repair it. At such instances, you can hire a contractor to rehab the house which saves your time and money.

If you buying a rental property for cash flow income then analyse the financial issues and decide whether to do a partial or full rehab. If the property is in bad condition and structurally not good then it needs a full rehabbing. Whereas if the house is in good structural condition then it may need only basic repairs and renovations like painting, carpentering etc. At such cases, you can opt for partial rehabbing.

If you are rehabbing the house for personal accommodation then you can either do it by yourself. Not all the complex repairs related to water lines, electric wires can be done but you can give a fresh coat of paint to your house and do some minor repairs.  Based on your financial position, budget and management skills you can either do the rehabbing by yourself or hire an efficient contractor who can complete the task within your budget and on time.

What if i have to do the rehabbing by myself?

If you have decided to do the job all by yourself, then plan accordingly. The contractor would create a neat plan before starting the rehab job. Likewise before starting the rehab process take a note which tools are required and materials needed and also have a calculated timing. Do not drag the process for so long and complete it within the timeline.

Another important factor is to keep track whether the process gets completed within your budget. Following these guidelines you can easily get the job done completely.

Hiring a contractor can turn out to be a great hassle if you are not finding a good one. Though it saves lot of time by hiring a contractor, finding the reliable one and getting a bid might take long time. So if you are about to start the process then immediately start bidding the contractor soon.

Conclusion:-

If you are very particular about flipping houses, just do not go through the blog alone. Educate yourself much with the concept of flipping houses.There were also certain people of the real estate flipper industry who involved in illegal activities including making the appraisers to raise the value of the property in a false manner. Also they involved in faking the required documents.So the key is to carry out the flipping activities in the right manner.

Generally, a pre planned rehab process never goes out of your budget, but sometimes due to your miscalculations it may go over budget and take longer time than expected. So you need to keep buffer timing before starting the process. With the hectic timeline, you can’t finish the process quickly. 

Dc Fawcett, the founder of Virtual Real Estate Investing Club, has written on the real estate in his blogs. One could go through the blogs and get a fair idea regarding flipping houses.