Real estate can be an excellent investment that provides cash flow and appreciation.
One way to jumpstart your career in real estate investing is to start flipping houses.
Flipping refers to buying a house that needs work (often at a low purchase price), making repairs and renovations, and then selling the property at a profit.
With the right approach and access to funding, you can fix and flip your first house too.
If you’re wondering “How do I buy my first property to flip?” we’ve got you covered. Here are the steps to flipping a house and how to get financing.
What’s the first step to flipping a house?
Before you think about purchasing a fixer-upper, you need to get your finances in order.
You need to have enough money saved to make a down payment — at least 20% of the home’s purchase price — and your credit score must be at or above the lender’s minimum requirements.
But that's not all. You also need to pay closing costs, which are usually about 4-5% of the home price. Closing costs combined with your renovation budget add up to a substantial amount of cash.
For example, if you purchase a property for $200,000, you'll need $55,000 at closing. However, there are ways to finance even these costs.
