When first getting started in house flipping, it can feel a bit like trying to drink from a fire hose, as there’s so much you need to learn.
So to make it easier when first getting started flipping houses, we compiled this list of the most important skills that every house flipper needs.
To help you focus on the skills that really matter when flipping a house, in order to ensure that your first house flip is a successful one.
1. Ability to Raise Capital
One of the most important skills every house flipper needs is the ability to find and raise capital for their flips.
As capital or money is the lifeblood of any house flipping business because without capital your entire house flipping business would grind to a halt.
So the first skill you need to master when getting into house flipping is learning where to find capital for your house flipping business.
Sources of Capital for House Flips
- Private Money
- Hard Money Loans
- Real Estate Partners
- Home Equity Lines
- Conventional Loans
- FHA Loans
- FHA 203K Loans
For an in-depth look at some of the most popular ways to find money for a house flip, check out our article “How to Get Money to Flip a House“.
2. Networking Skills
Every successful business involves people and networking and house flipping is no exception to this rule.
As house flipping requires networking from the initial acquisition of the property all the way through the rehab and certainly during the sale of the property.
So in order to be a successful house flipper you need to start working on your networking skills by developing and building out your house flipping network.
People that Should Be in Every House Flippers Network
- Other Real Estate Investors – While it might seem strange to include other real estate investors in your network, as they will often be your competition. Other real estate investors can be a great source of properties to flip, as it’s not uncommon for a real estate investor to wholesale a property to another investor.
- Wholesalers – There are investors in real estate that do nothing but look for good deals on property, so they can then flip the house to another investor at a wholesale price for a quick profit. So you definitely need to add real estate wholesalers to your network for additional sources of property.
- Real Estate Agents – Real estate agents can be a great asset when selling your flips as well as a valuable resource for properties. As they often have an inside track on homes about to hit the market as well as off-market listings.
- Contractors and Sub Contractors – One of the most challenging aspects of flipping houses is often finding quality contractors and subcontractors to work on the house. So you definitely want to start adding recommended and quality contractors to your network as soon as possible.
- Accountant – A good accountant is mandatory for handling your taxes when flipping property. As it’s not just about how much you make but also how much you keep. And a good accountant will help to ensure you keep as much of the house flipping profits as possible.
3. Property Valuation Skills
If you want to be a successful house flipper, then you have to develop your property valuation skills.
So before you ever flip your first house, you need to learn as much about your local real estate market as you can.
By learning such information as current inventory levels, average sales price, average days on market, and any other information about your market that would help to evaluate potential house flips.
Then once you’ve armed yourself with this information, you want to turn your efforts to valuing potential flips by using the information you learned from your market research.
In order to determine what a good price for a piece of property is and what you might be able to sell it for fixed-up.
4. Ability to Estimate Repair Costs
In order to evaluate property and its potential profit, you must develop your repair cost estimating skills.
As the repair and rehab costs of the flip will be the largest expense you have beyond the purchase of the property itself.
And underestimating repair costs while evaluating a property, can have a big impact on the potential profit for the flip.
For example, if you estimate the repair costs on a property to be $30,000.
And then use that $30,000 to estimate the potential profit of the home to be $20,000.
If the actual repair costs end up being $50,000, your potential profits on the flip just went from $20,000 to $0.
To find out on average how much you can expect to spend on the rehab of a house, check out our article “Average Cost to Flip a 3 Bedroom 1500 Square Foot House“.
5. Negotiating Skills
Negotiating skills are another vitally important skill that you need in order to maximize your house flipping profits.
Because every dollar you protect before, during, and after a house flip is an extra dollar of profit in your pocket.
For example, while a $100,000 might be a good deal on a particular piece of property, if you can negotiate the price of the property down to $95,000, that’s another $5,000 in profit for the same amount of work.
Another place where you might use your negotiating skills on a house flip is on the rehab of the property when you’re negotiating with contractors.
Because while $10,000 for a bathroom remodel might be an ok price, if you can get the contractor down to $8,000, that’s $2,000 of extra profit for the house flip.
6. Multi-Tasking Skills
In order to successfully flip a house, you have to be an excellent multi-tasker and be able to wear many different hats at the same time.
As house flipping is a multi-faceted enterprise that requires not only a lot of skills but the ability to use these skills all at the same time.
Aa a house flipper could start their morning looking at a few potential house flips, then end up doing some light demo on a house later in the day.
Before meeting with a contractor to discuss a rehab project, and then finish up their day by working with a real estate agent to get a flip listed for sale.
7. Interior Design Skills
While you don’t have to be a professional interior designer to flip houses, it’s important that you develop your interior designer skills especially when first starting out.
As you more than likely will not have the budget for a professional interior designer and will need to make most of the design choices on the flip yourself.
And one of the best ways to do this is to tour new construction homes and then copy and mimic the styles and interior design features you see.
Because I can guarantee you, while you might not have the budget for an interior designer, any large builder will almost certainly be working with one, to make sure their houses are in style and on point when it comes to interior design and color schemes.
8. Communication Skills
Developing good communication skills is paramount to ensure that every aspect of the house flip goes a smoothly as possible.
As every aspect of the house flip from the acquisition, to the rehab, to the sale of the property will involve communication and people from start to finish.
So to ensure that these interactions and house flipping steps go as smoothly as possible, make sure you are communicating clearly on exactly what you want and are fully listening and understanding what people are saying in return.
Always Get It In Writing
While some things can be accomplished with a handshake, once you’ve developed a certain amount of trust with someone.
When you’re flipping a house, it’s always best to get everything in writing no matter how good of a communicator you are.
That way everyone is on the same page and there is something in writing to refer back to in case someone needs a refresher on what they promised.
Things You Should Always Get in Writing When Flipping a House
- Purchase and Sale Contracts
- Contractor Bids
- Invoices
- Partnership Agreements
- Finance Terms
- Any Agreements that Involve the Flip
9. Project Management Skills
Managing a flip from beginning to end is quite an undertaking, that often takes anywhere from 3 to 6 months to complete and a lot of planning and organization along the way.
To learn about the timelines involved in flipping a house, check out our article “How Long Does it Take to Flip a House? Complete Timeline“.
So in order to successfully flip a house, you have to learn how to successfully manage a flip by developing your house flipping project management skills.
Because each house flip should be treated and managed as a multi-step project that needs to be fully planned out and organized.
Key House Flipping Property Management Skills
- Learn and understand all the different steps and stages of a house flip and how to manage them.
- Learn how to estimate costs and then develop budgets based on those cost estimates.
- Figure out and know who will be involved in each step of the house flip.
- Make sure everyone involved in the house flip is receiving the management and guidance they need.
- Keep a close eye on the numbers as well as the timeline, to make sure the flip is staying on budget and on schedule.
10. Renovation and Rehab Skills
Renovation and rehab skills is another important skill you should work on if you plan to flip houses.
As they can help you keep a handle on the rehab costs of the flip and allow you to save some money by putting some sweat equity into the property.
But that doesn’t mean that you need to or even should do all the work on a house flip, as some things are best left to professionals, such as electrical, HVAC, and roof repairs.
However, any work you can do such as demo, painting, or light repair work is money that you don’t have to spend on labor and instead goes right into your pocket as profit when you sell the flip.
Renovation and Rehab Skills Every House Flipper Should Have
- Painting
- Demo
- Drywall Repair
- Carpentry
- Cabinet Installation
- Light Plumbing Work
- Landscaping
11. Basic Accounting Skills
While you should leave things such as tax filings and major accounting to a professional accountant, to make sure things get done right.
If you plan to flip houses you should have some basic accounting skills that will allow you to keep detailed records of your house flips, create budgets for your anticipated expenses on the flip, and create basic balance sheets for each flip.
In addition, you should also have a general understanding of business accounting in order to run your business properly and to make sure you always have enough cash on hand to run your flipping business.
12. Selling and Marketing Skills
After raising capital and property valuation skills, selling and marketing skills is the next most important skill that every house flipper needs to have.
Because no matter how good of a deal you got on the property or how nice you made the house, if you don’t market the house properly and can’t find a buyer it’s all for nothing.
So if you plan to flip houses you need to know how to properly market and sell a home for top dollar in order to maximize your potential profits on every house flip.
And this still applies if you plan to use a real estate agent to sell your flips, which I would recommend, because you need to know how to sell a house properly to know if your real estate agent is doing a good job or not.
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