Your Most-Asked Questions About Property Investing and House Flipping

Your Most-Asked Questions About Property Investing and House Flipping

If there is one thing I’ve learned in the last couple years, it’s that people tend to have a lot of misconceptions about property investing.

I can’t say I blame them. Most of the knowledge people have of property investing or house flipping comes from sources like HGTV, which may be wildly entertaining but obviously not the most accurate.

I won’t spend too much time on a preface, but I do want to add a disclaimer. None of what I’m sharing today should be taken as financial advice. I am by no means an expert, nor do I pretend to be one – I’m merely sharing our own experience and what has worked for us in hopes of shedding some light on the topic in general.

Think of this post as more of a candid conversation between friends. Now, let’s dive straight into your most-asked questions that you submitted on Instagram.

“How did you get into property investing?”

We happened upon house flipping serendipitously. The very first house we bought – back in 2015 – was a 1930 bungalow. It had stood abandoned for 20 years prior to us buying it. To say that it was not in a livable condition would be a major, major understatement. Take a look below.

Your Most-Asked Questions About Property Investing and House Flipping

The irony of it all is that we weren’t even looking to buy a house at the time! We randomly came across a Craigslist ad for a dilapidated, old house with nearly 6 acres of land and thought, “Hey, this could be fun – right?” Fun fact: I didn’t even see the house until after we signed the contract!

Talk about being young, wild and free, ha!

Joking aside, our rationale went something like this: Every person has the same couple hours of free time in the evenings after work, right? Why not do something worthwhile with that time? Instead of watching TV or sitting on our phones or whatnot, what if instead we had a hobby that we both enjoyed, something that could benefit our life in the long run? That’s what remodeling became for us.

We demoed that first house down to the studs and completely remodeled it from the ground up (with lots of help, of course). We then subdivided the land from it, and sold only the house at a profit 3 or 4 years later. It was never our intention to flip homes; it was just time to move on from that property as we began growing our family. But the success of that first sale prompted us try the process again – except with a shorter timeline.

So, that’s sort of the short version of how we got into property investing. Important lessons to note:

  1. At the point of sale, we had already paid off our mortgage.
  2. We were able to subdivide and keep nearly 6 acres of land, which further expanded our real estate portfolio.
  3. This entire process took a lot of financial self-discipline and 3-4 years of our life, but this was a major step that propelled us forward and helped us gain momentum.

Your Most-Asked Questions About Property Investing and House Flipping

“What is your ultimate goal for doing what you do?”

Our ultimate goal can be summed up in one word: freedom.

Most people mistakenly think that property investing is all about getting rich – and doing it quickly. Sure, that may be the case for some people, but it has never been our intention. When we sold that first bungalow, we realized something very important: With hard work, self-discipline, temporary sacrifices, and the right strategy, property investing could allow us to establish a more intentional, more self-sufficient work-life balance. We could pay off personal debt, establish both an active and a passive source of income, and ultimately turn our hobby into a business that would give us total freedom to prioritize our life.

Your Most-Asked Questions About Property Investing and House Flipping

“How do you go about finding houses to buy?”

The most common places to look for investment properties are online services like zillow.com, realtor.com, redfin.com, auction.com, etc. You can also find “For Sale by Owner” properties from places like Craigslist, or by just driving around desired neighborhoods. Another option is to establish a great working relationship with a real estate agent, who can then notify you of properties as they are listed on the MLS.

The more you learn about property investing, the more you’ll realize that no one single way of doing something works for every person. Every investment strategy is individual. As with many things in life, the lesson here is to not put all of your eggs in one basket, so to speak. Diversifying your strategy puts you in a better position to reach your goals.

Your Most-Asked Questions About Property Investing and House Flipping

“What type of things do you look for in a potential fix-and-flip?”

Whether or not a property is worth the investment is a very personal choice. Design preferences, resources, your comfort level with risk-taking, connections, level of expertise, the local real estate market, the economy, etc. etc. etc. are all factors that decide whether or not a property is right for you.

For example, our wish list will look different than that of someone hunting for their first investment property. I actually shared an entire blog post about this topic here, if you’d like more details. But in short, we generally look for properties with a good location, never the best house in the neighborhood, good structural integrity, a functional floorplan, preferably tall ceilings and lots of natural light, a good yard or the potential for it, and most importantly, a purchase price that makes financial sense.

Your Most-Asked Questions About Property Investing and House Flipping

“Is flipping houses profitable?”

The profit from each project depends on so many factors: the purchase price, the materials and finishes used, how well you planned ahead and your ability to stay within budget, how much labor you’re capable of doing yourself vs. hiring out, how quickly you’re able to finish, list and sell the property… Obviously, it’s important to understand the real estate market, what buyers are looking for, which updates are worth the ROI (return on investment) – there’s just so much to consider, and every project will look different.

Having said that, some research shows that the average gross profit from a property flipped in 180 days is $60,000. So, if you’re someone who needs a benchmark to go off of, there’s that. But again, I cannot reiterate enough that there are numerous factors that affect this number. The biggest advice I can give is to educate yourself on this topic to maximize your earnings and avoid mistakes.

Equally important to note: Real estate investing involves a lot of risk. There are several options to mitigate the risk, including doing your due diligence, starting small, working with a partner, diversifying your portfolio with rental properties, short-term vacation rentals, etc., having multiple exit strategies, and more.

Your Most-Asked Questions About Property Investing and House Flipping

“Do you work with a real estate agent?”

You don’t necessarily need to go through a real estate agent to buy or sell properties. But working with one you trust does have its benefits, especially if you’re new to real estate investing. A real estate agent can help you evaluate the market, get pre-approved for a loan, or walk you through the process in general.

A real estate agent – especially one with house flipping experience – typically has an extensive network of other real estate professionals like lenders, loan servicers, wholesalers, etc., who may be able to refer you to properties that you can’t find anywhere else on the market. Plus, as I already mentioned, a real estate agent has direct access to MLS, which isn’t accessible to the general public.

Your Most-Asked Questions About Property Investing and House Flipping

“How does your blog fit into what you guys do?”

What I’m about to say may seem shocking or harsh, but let me be completely honest. If you care about interior design, I do not recommend getting into house flipping – unless you have a successful design blog and are able to secure sponsorships for some of your projects. Otherwise, you will always have two contradicting end-goals that are at direct odds with each other, which obviously is not a sustainable business plan.

Think about it: In a traditional fix-and-flip scenario, success is defined by how quickly and how inexpensively you’re able to turn a property around. Ultimately, it’s all about the numbers. But if you’re someone who cares about the aesthetic factor of the renovation, you will find the flipping process unnatural, contradicting and just plain frustrating.

House flipping simply doesn’t provide enough of a margin to do anything out-of-the-box as far as design; most flippers do the bare minimum and call it a day. So any design decision that goes beyond the bare minimum is already cutting into profits. A successful flipper – in the traditional sense of the term – is not interested in interior design, originality or high-end materials. It all comes down to the idea that every penny spent is a penny less that you earn. That is exactly why you’ll find typical house flippers using the same exact materials in house after house after house; preselected materials save time, which equates to more profits. Flipped houses are on a whole new level of cookie-cutter basic – but that’s a soap box for another day.

But if you’re someone who appreciates design, you’ll, of course, be concerned not only about function but form and originality, too. And if you can’t come up with a way of incorporating those things into your house flip without taking away from the ultimate profit, then you’re shooting yourself in the foot, so to speak.

That’s where having a successful design blog comes into play. Not only are you able to secure sponsorships to offset some of your project costs, but the projects also translate into consistent blog content. So you’re essentially killing two birds with one stone (a horrific expression, by the way). Consistent content is essential for a blog’s success. Plus, it can provide other forms of revenue that you can then put towards projects.

Your Most-Asked Questions About Property Investing and House Flipping

“How do you get companies to sponsor your projects?”

We pay out-of-pocket for the bigger part of our projects. But in the event that I’m able to line up a sponsorship, the workload associated with it is much bigger than most people think. That’s a big reason why I’ve scaled back with sponsorships as we’ve taken on more investment projects. I simply don’t have the bandwidth for that additional work.

I know that blogging can appear as a fun and easy job. But let me assure you: It’s still a job. For every sponsorship I take on, there’s 40-100 hours of mundane, administrative work alone that has to happen before we can even talk about the fun things, like picking out products. Even from the perspective of time-equals-money, sometimes sponsorships are simply not worth it.

Besides sponsorships, a blog can help with house projects in other ways – mainly ads, affiliate links, and guest posts. The first two are dependent on blog traffic, which is why it’s important to create consistent content. That is where house projects come into play.

Guest posts are when you’re hired by a brand to create content for their own website rather than your own. This scenario is great for someone who creates high-quality content but doesn’t have consistently high traffic for lack of posting (ahem, me!).

I have an entire blog post that goes into great detail of the inner-workings of brand collaborations, which you can read here.

Your Most-Asked Questions About Property Investing and House Flipping

“How are you able to get anything done with two young children?”

This is probably my most-asked question. As much as it flatters me that you think I’m out here accomplishing all the things – that couldn’t be farther from the truth. Let this be your reminder that what someone shares online is but a tiny fraction of their life.

Full-house remodels – especially if you’re managing multiple projects – are a full-time job. Creating consistent content for a blog is a full-time job. Raising two children 3 and under is a full-time job. Do you see where I’m going with this?

You don’t have to search far for an example; just look at how long it took me to finish this blog post… It’s been weeks! That should tell you the pace with which I get things done.

Sure, it’s frustrating at times; I’m the type of person who strives on crossing items off my to-do list. But as the saying goes,”Little by little the house is built.” Any small progress on any of these fronts – house projects, the blog, raising children – is progress that deserves to be celebrated.

Important to note: Early on, the husband and I decided that while our children are young, I will be present with them as much as possible. So I save any sort of computer or design work til nap time or after they’re down for the night. As for any house projects that I tackle, either the husband or my mom watches our babies.

Of course, there are smaller projects that I can do with them around. Installing outlet covers, changing door handles or cabinet hardware, assembling furniture, hanging pictures – all these things can be stopped mid-project. I learned quickly, however, that projects requiring my full attention – like installing tile – are best left for when the children are on someone else’s watch.

Renovating with children is not for everyone, but it has been a positive experience for us. Kids are resilient, and we really like that they’ll grow up appreciating the fruit of hard work.

Your Most-Asked Questions About Property Investing and House Flipping

“I would love to do what you’re doing. How do I get started?”

I’ve covered in great detail the uniqueness of our situation. That makes it hard to provide some sort of road map for someone else. Not everyone interested in property investing will have a blog or a husband with a background in finance. Not everyone will have a dad who’s able to help out with projects or a mom who’s able to help out with the littles. Our situation is unique – as is anyone else’s. So when I get messages asking for advice, I’m often at a loss for words.

My most important advice: Educate yourself as much as possible about property investing and finances. Check out the following free resources:

Getting started is a lot easier if you already have equity in an existing property. You can use it to borrow more and build a substantial portfolio quicker. Of course, it’ll all depend on your personal financial situation, how smart you are with finances overall, and your ultimate investment goals.

Your Most-Asked Questions About Property Investing and House Flipping

Looking for more inspiration? Check out the following posts about our property investing adventures:

Posted in PROPERTY INVESTING.

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