When it comes to ways to make your money work for you, there is nothing better than investing in real estate. As with any investment, you have to educate yourself on the risks and rewards. Real estate has seen some outstanding numbers the last four years, but all of us remember clearly when the Great Recession hit due to some bad real estate investments on mortgages. Risk tolerance, then, plays heavily in how one looks at real estate. Do you take the conservative approach and seek out good properties that will be bring some outstanding cap rates? Do you seek the big profit return from a risky venture like a flip, where you can realize some great profits, but only if you find the right property at the right price. Once again, education plays a key role along with getting the required experience. If you look online, there will be plenty of websites that profess to get you both the education and the experience necessary to succeed in real estate investing. How do you know which ones are the best and truthful?
Lucky for you, we have compiled a list of seven useful tools that will help you to invest in flip properties. It is not a comprehensive least by any stretch of the imagination, but these tools are ones that will help you no matter where you are in your business of flipping homes. Once you are done looking over the tools, be sure to check out our Flip Worthy program, where we give investors up to a 33% discount on their MLS listings fees.
1. Complete Resource – When looking online for a complete resource to invest in flip properties (or any real estate investing), you will be quickly surprised by the lack of a place that you will be able to use for education, networking and even making real estate deals. There is one source, however, that knocks the socks off anything else available online and that is biggerpockets.com. This site has it all if you want to invest in flip properties. You can learn from the connections with other investors. The webinars and podcasts are the best available. The investment spreadsheets will go a long way towards you understanding the numbers you need to know to invest in flip properties. It has a free plan for those who just want to explore and two other levels that allow you to do more on the site. For example, the Pro account gives you access to the marketplace where you can start to research off market deals from around the country. If you want to invest in real estate of any kind, you must join the biggerpockets community. You won’t be sorry for doing so.
2. Go back to School – Real estate is a big complex mechanism that requires a lot of knowledge to succeed. It also evolves as the market and laws) change for the better or worse. You have to stay on top of the game and one way to do this is to keep educating yourself. There are plenty of sources on the web today that will help you. Google can be your friend here so go search for the topic you want to know more about and most likely there is some kind of educational resource for it. We did that and found two that we like. Udemy is one resource where you can pay to take a course online. These courses are self-paced so you don’t have to worry about meeting at a particular time. There are currently over a hundred courses on real estate in their catalog (four for flipping). Some are even for free. Check out the reviews to find out which paid courses are the best. Our second favorite site to invest in flip properties is Freedom Mentor, who offers a comprehensive course curriculum. This is just one of many you can find, but Freedom Mentor covers the wide breath of information on the topic. It is also free. Check it out!
3. Find a lender for flipping – When you invest in flip properties, you might have to use some creative financing to make the deal happen if your local bank won’t help you. Once again, Google can be your friend here as there are ample lenders online looking to help you fund a deal. We went through several of these pages and the one we like the best is Fund that Flip. We didn’t think it necessarily had the best terms on the loan, but the site itself is easy to follow and it even gives you some great spreadsheets to help analyze your flip deal including a quick analysis tool and a way to review rehab costs. It has a page on recent funded projects so you can get a good sense of what they are willing to do for you. As far as the loan itself, they have a quick five minute answer for you if your circumstances are pretty standard (exceptional situations will probably require a phone call with them).
4. Learning from others – If you are a newbie to investing in flip properties, the best way to learn is to find a mentor or a networking group and ask a lot of questions. We don’t recommend you flip properties on your own isolated island. There is no reason to reinvent the wheel and there are flippers out there who know what they are doing with many of them willing to share tidbits of advice. One great place to find flipper networking events is meetup.com. The site currently has a 178 meetups about flipping properties in its database with over 57,000 members. There is bound to be one near you. If you don’t find one, you can always start one yourself. Either way, this site is a great way to meet others who can help you along your path to invest in flip properties.
5. Software to lead the way – One tool that is a must have for any flipper is software that will help guide you in your project and help you keep to your projected targets. There are plenty of spreadsheets available through some of the sites already mentioned in this post, but if you want a more sophisticated software package, you need to check out Rehab Vaulator. This software offers free access to its basic functionality and then you can pay $29 a month for the full feature site. It is a good bargain for software that takes every angle possible to fully evaluate a flip deal. As a secondary source, if your agent has access to RPR through their realtor association, there are some fantastic tools there that an agent can use to help you evaluate your deal.
6. Find the right contractors – It is always a good idea to have your team in place when it comes time to invest in flip properties. The team should consist of a good lender, realtor, and attorney. You should also find yourself a list of good contractors to call upon to do the rehab. Contractors are very difficult to locate and can even more difficult to find one that does the quality work you need to resell the house. Your best option is to ask around at the meetups and within your sphere. If you do have to look online, you have large sites like Thumbtack, Angie’s List and even Upwork. You want to be sure to check out the references of any contractor you find online and be sure to only agree to pay a portion of the fee upfront with draws set up for material costs. It is so easy to get burned by a contractor today that you want to play it very carefully before agreeing to work with one.
7. Insurance and Legal – Finally, you have to think about the less sexy items when you invest in flip properties. You need to find a good insurance agent that will be able to write up a policy for a flip property. Google is your friend here as well as we could not find one source listing out insurance companies that could help you with your flip property. However, a Google search will give you several individual agencies to research. Netquote has a great article giving a high level explanation of the different aspects of insuring a flip property. When it comes to attorneys, you can search for one through one of the many attorney directories online such as Findlaw, which allows you to browse real estate attorney by location. We do recommend you find an attorney before launching into your flip project as real estate is a legal mechanism and you will need an expert on your side in case things get dicey, which they can very fast.