Flipping a house can be a lucrative endeavor, especially if you're experienced in that area and have done so successfully in the past. But what if funds are extremely limited this go-round?
The good news is that you can pull off a house flip even if you're working with a pretty tight budget. You just need to know how to spend your money wisely. Follow these tips, and you may be surprised how much you can accomplish.
1. Fix actual problems before worrying about aesthetics
When you're flipping a house and money is tight, you can't afford to sink cash into high-end tiles or marble bathroom countertops when the plumbing system needs a complete overhaul and there's no working HVAC. Before you spend a dime on cosmetic fixes, make a list of the functional problems associated with that home and tackle those before moving on to aesthetic matters. That way, you'll at least be covering some very important basics.
2. Focus on key areas that lend to better resale
You may not care for the mildly outdated guest bedroom flooring in the home you're flipping, and you may find the choice of dining room shutters appalling. But before you spend money on areas of that home that may not even get used, invest your resources into improving high-profile areas, like the kitchen and bathrooms. Chances are, a buyer will let a lackluster den go if it means snagging an updated kitchen with stone countertops and sleek-looking appliances.
3. Do as much work as possible yourself
This should really go without saying, but the more handiwork you're willing to do yourself, the less your house flip will cost you. If you're not equipped to handle a complete renovation on your own, reserve your limited funds for the areas you really need help with, like electrical work or riskier construction-related endeavors.
4. Get your materials on the cheap
When you're renovating a home with your own two hands, the less you spend on the materials you use, the more you stand to save. To this end, it pays to explore a few avenues, such as:
- Salvage yards, where you never know what you might find.
- Other house-flippers or contractors, who may be willing to unload leftover materials from recent projects at a discount.
- Local hardware stores, where managers may give you a deal on discounted yet viable materials that are taking up too much room for comfort on shelves.
5. Buy tools you'll be using repeatedly rather than rent them
It's common practice to rent tools you don't use all the time rather than buy them, especially since doing so means you don't have to worry about storing them. But if you crunch the numbers, you may find that it actually pays to purchase certain tools rather than continuously fork over those rental fees. And if you're willing to buy a floor model, you might land a serious discount in the process.
When you're working with a sizeable chunk of money, house-flipping can be a fairly simple endeavor. But when funds are limited, it becomes much more challenging. If you're in the latter boat, do yourself a favor and draw up a budget for your house flip before diving in to the work at hand. A little planning on your part could really help you put your minimal resources to good use.