Think you can make money flipping houses? We talked to Justin Williams of House Flipping HQ about the art of making money remodeling houses.
If you’re a fan of HGTV, flipping houses looks like a fast way to make some money. But as is true of all reality based shows, things aren’t what they seem. Justin flips houses off camera and lets us in on how it really works.
Justin started as a real estate wholesaler. He found owners who wanted to sell quickly and not be bothered with things like repairs or evicting a non-paying tenant. He put the homes under contract and then sold the contract to to another buyer who was responsible for the repairs or evicting the tenant. Justin then collected a fee from the actual buyer.
Justin is now the final buyer in the equation and flips houses like a business. This isn’t a little weekend DIY hobby. He looks to make a 40-45% return on each house, purchased with money borrowed at 12-18%. This makes his net return between 28-30% per house. His goal is to flip each house in three to four months.
Justin doesn’t use a bank to purchase the homes. He uses private investors and hard money investors. The investors are not taking a great deal of risk because the house itself is collateral on the investment.
You can make money in this game but for most people who become successful, it takes six months to a year. The hardest and most important aspect of flipping is knowing what data to analyze and how to analyze it. How much the property is worth, the closing and holding costs, how much of a return you want on the investment.
If you can get a good house, the money will follow.Tweet This
If you decide flipping is something you’re interested in, be careful out there. There are a lot of scam artists charging thousands of dollars to teach you this business. Check out Justin’s site and podcast before jumping in.
House Flipping HQ: Justin’s website and podcast that will teach you the business of house flipping.
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