House Flipping Checklist
In this post: Discover what it takes to flip a house using our house flipping checklist.
Are you thinking about flipping a house? If so, you need to make sure you have everything covered. In this blog post, we’ll provide you with a house flipping checklist that will help ensure your success. We will discuss the different steps involved in house flipping and what you need to do in order to be successful.
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Financial Reward of House Flipping
One of the biggest attractions to house flipping is the potential for a large financial return. If you are able to successfully flip a house, you can make a healthy profit. This is especially true if you are able to buy a property at a great price and then sell it for significantly more than what you paid for it.
Cully and I joke that we are “slow house flippers”. Meaning we don’t flip house in the traditional sense. We have found our flipping success by fixing up the house we live in and selling it after two years to avoid paying capital gains tax.
Going this route has gained us over a half million dollars in just a few short years. Not bad considering the average traditional house flipper’s gross profit is $67k per flip*. If we went the traditional route of house flipping, we would have had to flip over eight houses to earn what we did from flipping two.
We do much of the work ourselves and hire out things that we don’t have time for or don’t feel comfortable or don’t enjoy doing. We permit everything to ensure it passes inspection and that there are no concerns from a buyer when it comes time to sell.
The work is completed within our own timeline. Our process works extremely well for our lifestyle and has been a key reason we have been rewarded with complete financial freedom.
I’m not saying going the “traditional” route or the “slow” route route is right or wrong, just saying that you don’t always need to go the traditional route to make a great living. The beauty is you get to choose what route works best for you.
The House Flipping Checklist
The House Flipping Checklist is broken down into 7 parts:
- Find Properties
- Make an Offer
- Evaluate
- Close
- Renovate
- Stage
- Sell
Now let’s take a look at the details of each step in the house flipping checklist:
Find Properties:
The first step is to find properties that have the potential to be flipped. You can find these properties by searching online listings, contacting real estate agents, or looking for foreclosures or short sales. You may even have luck finding a low priced property on Facebook Marketplace or Craigslist.
Cully and I don’t worry too much about where/how we find the house. If we put more time and energy into our searches, we’d likely find deals at lower prices. But since we don’t consider ourselves traditional house flippers, price is not always our priority.
The main thing we look for is the potential. For example, can we convert an unused space into an usable space. Our garage conversion cost us $18,000 and added value of over $125k. That was just one of the projects we did that increased our home value from just over $250k to nearly $500k.
Make an Offer:
When you find a property that ticks off most of what your looking for, you will make an offer. The offer should be based on the evaluation of the property, considering the repairs that need to be done.
As the buyer, Cully and I always use a realtor to help us with the entire home buying process. You do not have to use a Realtor, but it can help tremendously with the negotiation and overall process. We always recommend using a Realtor as the buyer.
Evaluate the Property:
Once you are under contract, you’ll want to have an inspection done on the house.
Hire a well regarded inspector that will provide a thorough report. Keep in mind that every inspector is different with how they approach their inspections. Some focus on every detail while others only focus on the major items. It’s up to you to decide what kind of report is of most value to you and go with the Inspector that meets your needs.
The way to know how the inspector’s approach is to ask them. They will often have a sample report they can share with you. This will give you an idea of how they approach their inspections.
Once the report is complete, you’ll work with your Realtor to identify the big ticket items from the report.
Next, bring in contractors for quotes. Its best to have working relationships with contractors that can provide quotes quickly. Most sellers won’t wait around forever for you to get quotes.
Be prepared and schedule contractors to provide quotes within the timeframe of your inspection timeline in your contract.
Close on the Property:
Once you’ve made it past inspection resolution and all is looking good, you will close on the property. This closing process can take a few weeks or longer, depending on the type of loan that you are getting and other factors.
Renovate the Property:
Once you close on the home, then it’s time to start renovating the property. This is where the house flipping planning really starts! You will need to carefully consider your budget and make sure that you don’t overspend.
Stage the Property:
Staging the property is one of the most important steps in house flipping. This is what will make or break your sale. You want to make sure that you stage the house in a way that appeals to potential buyers.
Staging is important because it allows potential buyers to see the house as their future home. They can visualize themselves living there and that’s what you want. You want them to fall in love with the house and feel like they have to have it.
Some professionals will tell you it’s not worth your time or money to stage a home. We disagree.
Staging a home is absolutely what contributed to all of the homes we’ve sold having multiple offers (including over asking offers) withing days of having it on the market. That includes times when the housing market was not as hot as it has been in the past year or so.
Sell the Property:
Once the renovations are complete, it’s time to sell the property. You can do this by listing the property yourself or hiring a real estate agent. There are pros and cons to each.
Pros of selling a house yourself:
-You will save on real estate agent fees
-You will have more control over the sale
Cons of selling a house yourself:
-It can be time consuming
-You may not get as much for the house as you would with an agent
Pros of hiring a Real Estate Agent:
If you decide to hire an agent, be sure to interview a few and pick the one that you feel most comfortable with.
-They will handle all of the details of the sale for you
-They will likely get you a higher sales price
Cons of hiring a Real Estate Agent:
-You will have to pay them a commission (usually around 5%-6% of the sales price)
-You don’t have as much control over the process
House Flipping Checklist: Things to Keep in Mind
There are a few things that you need to keep in mind when flipping a house:
It takes time:
Flipping a house is not a quick process. It can take several months from start to finish. Be patient and be prepared for a long journey.
It’s not as easy as HGTV makes it look:
Flipping a house can be a lot of work. Whether you hire out the work or do the work yourself, there is a lot that goes into it and things can often go wrong. Be prepared for this and have the mindset that you are up for the challenge.
You need to be organized:
This process will require you to be very organized. There will be a lot of different tasks that need to be completed and you need to make sure that everything is done in a timely manner.
House Flipping Checklist Conclusion
Flipping houses can be a great way to make a lot of money. However, it’s important to keep in mind that it’s not without risk. There is a lot that goes into flipping a house and things can often go wrong. Therefore, you need to be prepared for the challenges that you will face. But if you are willing to put in the work, house flipping can be a very rewarding experience.
I hope this house flipping checklist has been helpful. If you have any questions or comments, please feel free to leave them below. Good luck!
*stats according to smartasset.com and reflect Q2 2021 average
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