Southern California House Flipping Tips

House flipping can lead to great success or be a total flop. Your knowledge and experience is extremely important to ensuring a positive outcome. Here are a few Southern California house flipping tips based on our experience in the industry.

1. Find the Right Property, at the Right Price

As the saying goes, you should buy low and sell high. This is definitely true for real estate investments everywhere, including Southern California. Not every property is suitable for flipping. Your goal should be to identify undervalued properties with the potential for significant increased value after renovation.

In the past, the high volume of foreclosed properties offered an abundance of options. Owners of pre-foreclosures often don’t have funds to maintain their properties, so these homes are often in disrepair. Foreclosures are no longer big news since there are simply fewer available to purchase. Would-be flippers must resort to other means of identifying properties.

Connecting directly with potential sellers is the ideal situation. However, this requires some marketing initiative. Your goal should be to get sellers to reach out to you! Having a strong local network, that includes real estate agents, can also facilitate this process. There are also some public resources that can be used to identify pre-foreclosures or abandoned properties.

2. Work the Numbers

The second of our Southern California house flipping tips has to do with money, naturally. Once you identify potential properties, you will need the knowledge and experience to properly evaluate them.

  • What is the home currently worth?
  • What repairs are needed?
  • What level of renovation should you complete based on the neighborhood and buyer preferences?
  • How much will those repairs cost?
  • Are there potential added expenses?
  • How much time is needed to complete the repairs?
  • What will the post-renovation value be?
  • What is going on in the real estate market and how much might values change during the renovation period?
  • What return will you gain from this investment and flip, in the end?

Incorrectly answering any one of these questions could severely skew your numbers and impact your bottom line. Therefore, estimates should never be pure guesses. They should be well reasoned figures using known costs and previous first-hand experience. Only then will your financial analysis be complete and accurate.

3. Build the Right Team

As a Southern California investor, it’s unlikely that you will do all of the work yourself. Even if you have the skillset to do so, a quick turn-around is in your best interest. So, you must have a team in place to assist with your flip. You will likely need everything from general contractors to electricians, plumbers, landscapers, real estate agents, and more. Beyond finding quality, experienced, and reliable workers, you will also need a team that is available on your time-frame. Lastly, cost of labor can be a big factor as well. You will find that rates can vary greatly among contractors. Building strong relationships will be key.

4. Time Is Money

We’ve mentioned this already above, but no set of Southern California House Flipping Tips would be complete without dedicating a section to time. Time is money! When you invest in a house flip, your money is tied up and not earning you interest/income elsewhere. You also incur costs for electricity, taxes, etc. Therefore, the longer you take to renovate a property, the more it is costing you. Your goal should be to quickly complete the work and turn around to make a profit. When considering any investment, be sure to include time in your analysis.

Is Southern California House Flipping Right for You?

If it’s your first time considering a flip, this list of 4 key tips might be a bit intimidating. Will you put forth the right effort to identify properties? Are you numbers accurate? Do you have the right contractors in place? And can you complete everything in a timely manner? Much of what we detailed above requires years of practice and experience to do right. Can you take the chance that you may get it wrong?

Fortunately, there’s another way to participate in Southern California house flipping that is less risky. It’s called investment partnerships. Partnerships allow you to financially invest in real estate with the assistance of an experienced team of professionals to handle the different aspects of the process. The team has the network in place to identify properties, knows the right way to run the financial analysis, has the network of contractors already in place, and can quickly and efficiently complete flips. It reduces your risk and increases your potential returns! Contact us to learn more about Southern California Real Estate Investment Partnerships.