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The lure of the house-flipping lifestyle isn’t hard to understand. No job, no boss, no cap to what you can earn beyond the limits of your own skill and ambition. As an added bonus, you’re doing well by doing good — taking ugly houses, making them beautiful, and turning the keys over to proud new homeowners is a noble way to earn a living.
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But is it a living that average people with average backgrounds and average finances can truly attain? In most cases, probably not, according to many of the experts who spoke with GOBankingRates.
First, There’s the Whole Money Thing
If you’re an aspiring house-flipper who wants to get in on the action but doesn’t have the cash to make a move, the internet is bursting with inspirational tales of newbies who broke into the business without using a single dollar of their own money.
To be clear, there are documented cases of real people who started out with little or no money on their first flip who went on to become respected real estate professionals.
There are also examples of athletes landing starting quarterback gigs on NFL teams as undrafted walk-ons and local glee club singers signing huge record deals after winning “American Idol,” but those are hardly the norm, right?
In reality, you need money to flip houses — a lot of it. If you don’t have it, you’ll need to convince lenders and investors to gamble on you as a newbie with no experience, no portfolio, no track record and no skin of your own in the game.
Good luck with that.
“Depending on the house’s location and condition, your credit score and several other factors, flipping a house could realistically require you to pay well above $100,000,” said Tim Schroeder, licensed realtor and owner of Agent Marketing Essentials.
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Having the Cash Is a Good Start — But Only a Start
Money is a big part of the equation, but success depends on much more than your bankroll. If you don’t have the skills, experience and relationships to scout and identify properties, estimate rehab costs, understand the tax implications, contract out the work that you can’t do yourself, and acquire, carry, market, sell and transfer the property, you’ll notice that your once-hefty budget is getting slimmer by the day — and in the world …….