by Melanie Grimes

Created on: February 07, 2008   Last Updated: February 04, 2011

If you have imagination and are willing to roll up your sleeves, you can make money as a home flipper. Here are tips to increase your profit margin when flipping a house. With many houses on the market, purchasing a house is easy, but be careful to itemize the costs of repairs. Also, a slow real estate market can make a remodeled house slow to sell, so be prepared to hold onto the house for a while.

1. LOCATION, LOCATION, LOCATION
A good house will be in a good neighborhood. Preferably, it will be the least expensive house on a good street. Houses in this neighborhood have sold quickly. Look for homes where the other houses on this street were only on the market for a few days. Some of the foreclosures can make good flipping candidates, but ONLY if the neighborhood is holding up.

2. HIRE AN INSPECTOR
This will ensure that there are no big problems. Big problems are electricity, plumbing, roof, i.e. hidden items that are expensive to repair.

3. FIND A COSMETIC FIXER
This is where you, the flipper, can make the most money. Cosmetic fixing covers: paint, fixtures, flooring, landscaping. You may want to update kitchens and bathrooms as well.

4. GOOD BONES
Find a house with good bones. Good bones means good room layout, sturdy foundation. Classic designs.

5. BUDGET CAREFULLY
Itemize everything. Then add 15%. Something will always go wrong.

6. GET DISCOUNTS
Paint stores and smaller hardware stores may offer discounts to you. Explain what you are doing and that you plan to redo many homes. If one says no, ask another. Someone will be anxious for your return business.

7. DESIGN FOR THE NEIGHBORHOOD
Your completed house should be in a similar price range as other homes in the street. Make sure you use generic paint colors, and those common in the neighborhood. You may love pink houses, but they will not attract the largest pool of buyers. A buyer can repaint their house if they don't like the neutral color you have used, but they won't buy the house, if it's painted a color they don't like. (It's human nature!)

8. WORK WITH A REALTOR
Though it may be tempting to sell a house yourself, the reality is that unless your home is listed on the MLS and unless you are paying commission to a realtor, your home will not be viewed by many people and will be much harder to sell. Only 10% of people successfully sell their homes themselves in a good market, and in times like these, the odds are even stronger against a For Sale By Owner listing.

If you are looking for a home to flip, use your good taste, invest well, plan well, and you can make money flipping houses.

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