To start a house flipping business, you will need to have some cash and some basic business knowledge. Some know-how with home repairs will keep you ahead in the profits, especially if you can do minor repairs yourself. The key to house flipping is simple: buy low and sell high - but there are some steps in between that can help sharpen your skills and increase your profit.
When buying a discount property, such as from a tax sale or foreclosure, the home will be sold "as is". In some cases there will be little to nothing wrong with it, lest some minor cosmetic repairs. However, in some instances, the hidden features of the home will be the area most in need of repair, such as underground piping, roofing or the foundation.
Discount properties are purchased in haste, with no real estate prepping from the owners. This means that there was no termite inspection, or any other required maintenance done by the owners. The first order of business when buying an auctioned property is to run it through a vigorous inspection.
Once the structure and foundation have been put in order, the cosmetic repairs will be done to bolster the home's resale value. New flooring, replacing outdated tile, new bathroom fixtures and paint are standard procedures needed to get the house in marketable condition.
If you can do any of the repair work yourself, you will save thousands on construction costs - but the job must be done correctly without error or flaws. Check with your local Home Depot or similar retailer for free classes to educate their customers on tile work, installing drywall, landscaping and more. The store is counting on the class participants to buy their materials from the store, so there should not be a charge for the construction education.
Once the home is in top form, get yourself a reputable real estate agent and set the price of the home a bit lower than comparable homes in the area. This may get you additional offers, and may even start a bidding war. If you can offer to assist with closing costs, then the deal becomes even sweeter. For most home sellers, the profit margin is scant, but for those who purchased at auction, you have some financial leverage to offer incentives for a quick sale. Greed will get you nowhere. The housing market is fiercely competitive, and you will need to offer the prospective buyer a sound and reasonable offer to get the sale. If the house has not moved within six months to a year, you may wish to explore a rent-to-own option which will bring you some income.
Other ideas which can help any business succeed are taught in online business courses; taking even one or two of these a year can help you stay competitive no matter what state the economy's in.