I’ve been watching a lot of the house flipping shows on TLC and HGTV lately. I’ve also been doing some reading about house flipping and how to do it the right way. It seems like everyone has their own opinion about house flipping, but I am still intrigued by it. I am intrigued, because you really can be just an average joe and make some decent cash from it, no matter what the housing market is like. I mean, if some of the idiots on these TV shows can make money doing it, surely we can too, right? Well, I don’t think it’s as easy as the TV shows make it look, but I think you can be successful with it if you use wise judgment and don’t get too greedy. Here are five tips that I have observed to be very important if you want to make a profit off of house flipping instead of going bankrupt.

1. You make money when buying the house, not selling the house.You may have heard this real estate investing cliche before, but it has a mountain of truth to it. When you’re out to flip a house, you need to look for a BARGAIN in a nice neighborhood. You’ll find bargains in bad neighborhoods all day long, but that’s because no one wants to live there! If you can find a house that needs some major TLC in a nice neighborhood, then you’ve found the perfect flipper.
2. Don’t sacrifiice quality for saving money. I think one of the biggest mistakes amateur flippers make is that they try to do the bare minimum possible to make the house look good for the cheapest price without regard to the quality of the restoration work. Savvy buyers will notice the poor craftsmanship, and it can result in your property sitting on the market for far too many months. Obviously, you want to keep your costs as low as possible, but try doing this by getting bargains on materials. Use professionals to do work, or make sure that you have enough skills to take on do-it-yourself project.
3. Get a home inspection before you buy. If you think you’ve found a steal, there’s probably a reason why the asking price is so low. When you are looking for a bargain on a house, you are looking for a house that has horrible landscaping and horrible cosmetic problems on the interior and exterior. You want to stay away from houses with foundation problems, old roofs, plumbing problems, or zoning issues. Repair work for a foundation can be VERY pricey, and we all know that replacing a roof is not a drop in the bucket either. Get a professional home inspector to evaluate the home before you close on the house. You can probably get the seller to pay for this given the current market conditions.
4. Stage your newly renovated house for potential buyers. This tip comes from the show, “Property Ladder” on TLC. The host always recommends that they stage their house with furniture to give each room a purpose and allow buyers to visualize their furniture in the house. It’s true that buyers like to see a nice, clean house with furniture in it rather than an empty, cold house. Some sellers get into trouble by having too much clutter in the house, but all you want to do is put enough furniture in it to give the buyer a nice, visual experience.
5. Be realistic about your asking price and renovation budget. People always screw this up on the house-flipping TV shows. They think that they can spend $10,000 on the house, and list it for $100,000 more than the average market price. You need to be realistic about your renovation costs and determine which items can stay and which items need to be replaced. Kitchen cabinets are a big expense, so you need to figure out if you can restore them or if they’ll need to be replaced. Same goes with wood flooring, drywall, and bathroom vanities. Most flippers want to sell the house quickly, but they become greedy, so they try to sell at a higher price than what other houses in the area are selling for. Sure, you made the place look pretty, but did you increase the square footage? Did you add a bathroom or a bedroom? If not, you won’t be able to sell much higher than what the market brings. This is why you need to buy at a huge discount to make a decent profit!

I have one more thing to say. If you’re going to flip a house, do it with people you trust. Contractors are going to screw you over, casual friends are going to screw you over. Do it with a best friend, because if you guys are at your throats, you’ll still know that you love each other and the house flipping isn’t going to end the relationship. It might if the project really goes bad, but just make sure that you surround yourself with people you trust.