Yes, it’s all the rage … reality TV shows like Flip This House, Flip or Flop, and even the one filmed here in Indy, Good Bones … they all make it look so easy, right? And the reality celebs reap incredible profits on all the sales. It’s no wonder I get approached fairly often by new investors who want to be flippers. I mean, what could go wrong????
When asked, I tell people the harsh reality of the flipping world:
- When you estimate repairs/updates, there are always unplanned expenses and repairs that pop up. You should always pad your repair estimate to cover those unexpected surprises.
- What if you can’t sell it immediately? What if it sits six months, or even more? You’re still carrying all your holding expenses, i.e. utilities, taxes, insurance, mortgage — slowly draining your eventual profit.
- In a really tight, strong market, like Indianapolis (and many others), there isn’t a lot of wiggle room between what you can purchase a fixer-upper for, and what you can sell it for on the “flip side.” Bargains have gotten much harder to find.
- Several of the HGTV celebrities have started programs/seminars you can purchase, where they’ll lend you money, teach you, get you set up, etc. How well do you think they know YOUR market? And many of their programs are 30K+ — crazy! I’m attaching an article that addresses the “business” of flipping and the pitfalls. It’s a good read.
My best advice would be to contact an experienced local flipper who might be willing to mentor you if you’re super serious about pursuing this route. Flipping houses isn’t guaranteed, steady income, and it isn’t for the faint of heart!