Although I encourage you to read every single word of this book from start to finish, you’re welcome to skip around to acquire your knowledge on a need-to-know basis and to completely skip the sidebars (in shaded boxes). Although the sidebars may be too fascinating to ignore, they’re not essential.
One brief note: Within this book, you may note that some web addresses break across two lines of text. If you’re reading this book in print and want to visit one of these web pages, simply key in the web address exactly as it’s noted in the text, pretending as though the line break doesn’t exist. If you’re reading this as an e-book, you’ve got it easy — just tap the web address to be taken directly to the web page.
Foolish Assumptions
If you’re reading this book, I assume you’re a homeowner. I wouldn’t buy a car from a salesperson who didn’t drive, and I wouldn’t buy a house from someone who rents an apartment. When you own your own place, you pick up some street smarts about the value of a home, its emotional effect on people, its value as an investment, and the work required to properly maintain it. If you’re not a homeowner, sell this book and put the proceeds toward a down payment on a house. Come back in a couple of years. I’ll be waiting for you.
Other foolish assumptions I’ve made include
You’re of sound mind and body. You can be a little flighty and out of shape, but if you can’t make rational decisions or talk coherently on the phone, or you don’t have the physical strength and energy to get off the couch, house flipping may not be for you.
You’re interested in residential, not commercial, property. Assuming you’re new to this house flipping thing, focus on the type of property you would buy as a homeowner. Later, when you’re more experienced, you can venture into the world of commercial real estate.
You’re prepared to learn from your mistakes (and mine). I can’t guarantee that you’ll profit from your first flip, but I can guarantee that you’ll make mistakes. Consider them an essential part of your education. This book was made possible by all the mistakes I’ve made. Without those mistakes, I’d have little wisdom to impart. The more you take away from the mistakes I made, the fewer mistakes you have to make yourself.
You want to flip properties legitimately. Con artists often flip properties to scam buyers and lenders. I’m not a con artist, and I denounce illegal, unethical flipping. By flipping legitimately, you stand to earn much more than a low-life con artist ever will, and you keep your reputation and integrity intact.
Icons Used in This Book
Throughout this book, icons in the margins highlight different types of information that call out for your attention. Here are the icons you’ll see and a brief description of each.
Beyond the Book
In addition to the abundance of information and guidance on flipping houses that I provide in this book, you also get access to even more help and information online. Go to www.dummies.com and search for “Flipping Houses For Dummies Cheat Sheet” for a free cheat sheet that accompanies this book. It includes a checklist for revamping a quick-flip property, offers tips for financing flips, and more.
Where to Go from Here
Think of this book as an all-you-can-eat buffet. You can grab a plate, start at the beginning, and read one chapter right after another, or you can dip into any chapter and pile your plate high with the information it contains.
If you’re looking for a quick overview of house flipping, check out Chapter 1. Before you even start house hunting, check out Chapter 3 to discover how to build a strong support network and Chapter 4 to find out how to finance your flip — you need cash and plenty of it to flip a house. Chapter 11 helps you determine how much you can afford to pay for a property to increase your odds of walking away with a profit. And the chapters in Part 3 are indispensable for helping you track down potentially profitable properties and negotiate the purchase price and terms. Wherever you choose to start, you’ll find plenty of useful information and guidance.
Part 1
Getting Started with House Flipping
IN THIS PART …
Get up to speed in a hurry on the process of flipping houses.
Flip houses the right way and avoid fraudulent flipping schemes.
Find out whether you have what it takes to flip houses in terms of time, money, and mindset.
Explore a variety of house flipping strategies ranging from buy-fix-and-sell to buy-hold-and-lease.
Build a dream team of real estate professionals, lenders, and contractors to expedite your flips and cover your back.
Get your mitts on some cash to finance your flips by using your own and other people’s money (OPM).
Chapter 1
Brushing Up on the Basics
IN THIS CHAPTER
Progress always involves risk. You can’t steal second base and keep your foot on first.
—FRED WILCOX
Flipping sounds easy. You can flip a pancake. You