Turn on a television on the weekends and you’ll see all these shows detailing just how easy it is to make a bunch of money fixing up houses and reselling them.
If you believe the out of state pitchmen on radio & TV ads, then you can flip a house, working part-time, with no risk ever.
I’ve met so many people at our REIA events that feel like they can earn profits from flipping houses – just because they’ve seen it done on TV.
They think “I’m smart. The people on TV aren’t that smart. Why can’t I do this?“
The truth is this: flipping houses is a HIGH risk – HIGH reward investment strategy. There’s more to it than what you see in a 20 minute reality TV show.
Chances are, if you’re thinking about investing in real estate, you’re smart and successful. That’s great.
Maybe you have a degree – fantastic.
Perhaps you scored highly on the LSAT, SAT, MCAT or whatever – or you have different certifications – congratulations.
You may even be a super handyperson, capable of swinging a hammer with the best of them – give yourself a hand!
Do those industry-specific accomplishments make you adequately prepared enough to do a high-risk real estate investment?
If you’re a successful person looking to invest in real estate, you’re probably good at what you do because you have a great deal of tribal knowledge in your industry – but do you have that same tribal knowledge in real estate?
If you don’t – and it’s okay (even smart) to admit you don’t have that knowledge if you’ve never flipped a house – open yourself up for help.
There’s definitely a fun appeal to flipping houses. I get it. But it’s not really a beginner’s strategy or something a beginner investor should try to take on by themselves.
When you flip a house, you’re taking on a high degree of risks:
The biggest mistake new flippers make is trying to do all this themselves. Then they get behind, make repairs they don’t need to make, and end up going way over budget.
It’s estimated that first-time rehabbers will overspend by 51%!
Surrounding yourself with a group of like-minded, experienced investors is a great way to prevent yourself from making mistakes.
You didn’t get to where you are in your career without help. You had guidance, training, and mentors. Why would you think investing in real estate would be any different?
Many successful people who want to invest in real estate and want to flip houses do so because they want to put their own money to work.
That’s understandable. If you have $200,000 you’re willing to invest and it’s sitting in the bank, it’s just collecting dust.
But should you risk your own money to finance your house flipping project or should you use short-term, asset-based financing (at a higher interest rate)?
When you’re starting out as an investor, it’s much smarter to use other people’s money instead of your own. Frankly, it’s better to get a hard money loan.
Why? Why would I want to pay 12-14 or even 18% interest on money when I could use my own or use my relatives’ money?
If for no other reason, you get FREE advice on your deal.
To get a hard money loan, you’ve got to demonstrate to expert whether or not you actually have a good deal! Are you acquiring for the right price? Did you get the ARV correct? Are you budgeting correctly?
Chances are, if you can qualify for a hard money loan, then you’ve planned out a fix and flip properly.
You’ll also highly mitigate risk on your own money (should things go wrong) and earn a much higher ROI than if you fund the entire project yourself.
If you are looking to get started in real estate investing flipping houses, then our next Real Estate Investor Association event is perfect for you.
Club President Shenoah Grove show you how to do the following:
Discover the EXACT system that Shenoah Grove (participated in 1,200+ deals totaling over $250M since 2003) uses when flipping houses at our next event!