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How to Flip a House: An Overview

It would take an entire book to fully explain the process, but here’s a summary, with a few insights that may surprise you.

1. Decide whether you have the skills or interest in doing everything involved. This is a risk-filled proposition with many potential challenges. You must be committed to seeing it all the way through. 

2. Choose a targeted return on the cash invested. This is one of three components that will allow you to arrive at an offer price. 

3. Find a distressed property (either distressed by lack of maintenance or by the seller’s situation). 

4. Research to learn the final selling price (step 2 of 3 in developing the offer). This is the After Repair Value (ARV)

5. Calculate how much the repairs will cost (step 3).

6. Multiply the ARV by your desired rate of return, then subtract the repair amount. That’s your offer

7. Buy, rehab, and sell the property (there are about 40-80 sub-steps here - too much for a 2-minute newsletter)

It’s not for everyone, but it is a potentially lucrative business opportunity.