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House Flipping Business Plan  

Article by Nico Hohman

The house flipping process can be divided into three phases: the home buying phase, the home renovation and construction phase, and the home selling phase. You should plan each phase, knowing that each is very unique, so they all join together with the other two phases to produce a successful house flipping project.

Phase One: Home Purchasing

This phase is the most important phase because it will set the tone for the rest of your house flipping project. If you choose the wrong home to flip, you will be forced to pay more money and spend more time on the project than anticipated. If you choose the right house, the construction and selling process will almost take care of themselves.

Most real estate experts will tell you that you do not make money with the sale of your flipped house, but with the purchase of the house. You always want to have your end goal in mind – which is to make money. Therefore, selecting the right house to fit your budget and your schedule will pay off at the end of the project.

Phase Two: Home Renovation

The best strategy for a successful house flip is to set your budget and your schedule. There 3 important factors to consider when setting your budget and your schedule. They are time, money and quality.

Breaking these factors down, you will see that if you want to speed up the construction process, it is going to cost you money and the quality of the work will be affected, typically negatively. If you are looking to install the finest quality features, it will undoubtedly cost you more time and more money. If want to spend the least amount of money as possible, expect the quality to suffer and the duration of the project to last longer.

Phase Three: Home Selling

By this point you have already purchased a home to flip and have already completed the home renovation process. Now all that is left to do is sell the house and make your money.

There are 2 things your should to do make sure that you sell the home quickly and for the maximum amount of profit. You need to market your house and set the asking price 1% – 5% below market value.

If you set your home below market value, hopefully with the added improvements you made to the home, the potential home buyers will see that your flipped house is worth a great deal but does not cost them as much as other homes.

Also, when marketing your home, you should not only market your home yourself but also consider hiring a real estate agent. Working with a real estate agent will not only increase the visibility of your house by showing your home to potential home buyers but they will be able to list your home on the Multiple Listing Service (MLS.) The MLS list allows other real estate agents to find your flipped house and show it to their clients, which means even more potential home buyers!

There is no one right way to flip a house. What works for some people may not work for others. Determine your budget and schedule on a project-by-project basis and always have an end goal in mind from the beginning. If you can successfully do that, you are well on your way to a successful house flipping project.

About the Author

Nico Hohman is the founder and operator of My House Flipping Guide, the ultimate online source for everything you need to know about house flipping.

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