Concerned with ratings, TV shows rarely show the complete picture of house flipping with all the hurdles and unexpected costs.
If you are looking for some “real deal” stuff you are better off with consulting the valuable wisdom of some of the best books on flipping houses.
Without further ado, here are five things that house flipping shows won’t tell you, but books will.
You Have Different Financing Options—The Book on Flipping Houses, Revised Edition: How to Buy, Rehab, and Resell Residential Properties (J. Scott)
Before you profit from house flipping, you need to secure the money for purchasing your first fixer-upper.
What you see in shows is people with money in the pocket ready for their next project. In real life, you have to find the money first, unless you are from the few people that have enough own capital for such a project.
In this book, among many other things, J. Scott goes over the most common options for house flippers to secure funding.
From bank loans, through private investors, to hard money lenders and equity investors, you don’t even have to have savings of your own to start a house flipping venture.
You Shouldn’t Buy at Any Cost—Same as Above ↑
You might find the “perfect” house and even see how amazing it can get, but this doesn’t mean you should buy it at any cost.
To get a rough idea of whether it makes sense to buy a specific property, J. Scott uses the flip formula, a. k. a. Maximum Purchase Price (MPP) which should be below the sum of [expected sale price – fixed costs (taxes, fees, etc.) – estimated rehab costs – desired profit].
A pivotal moment here is to err on the conservative side with estimates, in addition to doing your homework on the market and rehab costs.
This means that you should prepare for higher expenses, and lower profit, just in case.
You Can Stumble in Many Places—FLIP: How to Find, Fix, and Sell Houses for Profit (Rick Villani)
In FLIP, Villani discusses the many things that can, and often, do go sideways with house flipping.
While you occasionally get a glimpse of hiccups on TV, it's not like experiencing them in real life.
In addition to house flipping...
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Like any high-value deal, there are many variables and question marks, like contractors doing a poor job, not showing up at all, or inspectors overlooking a significant problem.
This book takes you by the hand and walks you in detail through the whole process; showing you both sides of the house flipping coin.
Recommended House Flipping Posts:
You Will Be Dealing With a Post-Boom Market—Fixing and Flipping Real Estate: Strategies for the Post-Boom Era (Marty Boardman)
While on TV you hear the odd reference about the post-boom market, you wouldn’t get much valuable advice on how to deal in such an environment.
One of the main reasons for the financial crisis of 2008 was the easy access to hefty mortgages that banks gave to customers who couldn't afford to pay them back.
The economy is recovering, but the real estate market is still in a post-boom mode, so trading is different from the peak pre-2008 times.
Boardman wrote this book, as the title suggests, as a guide on how to flip houses during the post-boom era.
While it was published seven years ago, it's still worth reading today.
Recommended Mortgage Posts:
You Can Flip Properties Without Owning Them—Flip: An Unconventional Guide to Becoming a Real Estate Entrepreneur and Building Your Dream Lifestyle (Nick Ruiz)
Traditionally, house flipping goes through three steps: purchasing a property, fixing it up, and selling it. However, by wholesaling, you can house flip, i.e., quick-deal real estate, without doing either of the three.
Wholesaling puts you in the shoes of a broker—you find good properties find potential buyers and connect the two, getting a profit from the deal.
How to do it is what Ruiz teaches in this book.
The publication covers important but overlooked aspects of wholesaling properties such as how to find "off-market" deals, how to build rapport with property owners, and why you should find buyers before looking for sellers.