Fix\nand flip shows are always killing it.\n\n\n\nNot\nonly are they inspirational for many real estate investors and aspiring\nentrepreneurs, but they make a lot of money, too. \n\n\n\n\n\n\n\nIf you also want to join the bandwagon business there are a few things that reality TV doesn\u2019t show you. \n\n\n\nFor starters, you must be able to manage the risk and have a sound business plan. Besides, you should be able to develop a detailed budget, arrange to fund and be as quick as possible.\n\n\n\nReady\nto be a fix and flipper?\n\n\n\nHere are Few Steps Before You\nBegin\n\n\n\nHouse\nflipping is the process of buying a distressed, foreclosed, or low-cost\nproperty to sell it at a higher rate soon. Today, it\u2019s become a familiar and\nlucrative opportunity to make money. In fact, house-flipping is at a six-year high, inviting a lot more aspiring\nentrepreneurs and investors in the business. \n\n\n\nBut\nbefore you enter, you must be able to learn about the industry and your own\nfinances. \n\n\n\nAssess your Skillset\n\n\n\n\n\n\n\nIdentify the area of your property investment and determine the kind of renovation required. If you're in Houston, HAR.com is a great site to reference. Next, based on your experience, you can access the type of building and improvements you can oversee.\n\n\n\nLeverage Local Expertise\n\n\n\nTry\nto choose properties in your locality or network for starters. If you want to\ninvest in a new area, talk to the local residents. Remember, knowledge is everything\nin the real estate business.\n\n\n\nDon\u2019t Forget Local Laws \n\n\n\nNew\ninvestors often get blindsided by unexpected property or tax laws. Before you\nenter the market, make sure you are aware of all the applicable taxes,\nregulations, and fees. \n\n\n\nCalculate your Finances for a Fix and Flipper\n\n\n\nBefore any investment decisions, it\u2019s best to assess your personal finances. Not only will it help in planning your budget, but also help you understand your risk-taking abilities. \n\n\n\nThere\u2019s\nalways some risk associated with a first-time house flip. You can consider a hard money loan to fund your investment. It\u2019s an\nasset-based loan financing that helps you maximize your profits and secure your\nfinancial future.\n\n\n\nOnce\nyou\u2019ve covered the details mentioned above, it\u2019s time to go deep. \n\n\n\nStep 1: Prepare Your Business\nPlan\n\n\n\nYour house flipping business needs a plan with definable goals, strategies, funding, and insights. Plus, when you put your goals, profit expectations, and exit plans on paper, lenders will take you seriously. In short, your plan should include:\n\n\n\nA goal\nsummaryLead\ngeneration planMarket\nanalysisFinancing\nsourcesMarketing\nand sales planBusiness\nand personal bios with qualifications \n\n\n\nStep 2: Build your Fix and\nFlip Budget\n\n\n\n\n\n\n\nWhen\nyou start out, make a detailed budget keeping a few things in mind. Don\u2019t\nforget \u2013 expect the unexpected when it comes to house flipping. \n\n\n\nNo\nmatter how prepared you are, additional costs can come up at any time. When you\nhave the finances ready, you\u2019ll be stress-free and will manage the project\nbetter. \n\n\n\nThings\nto include in the budget:\n\n\n\nRenovation\ncosts with the help of a professional contractor Hiring\na realtor may cost you 6% of the sale value as commission Financing\ncosts wherein a hard money loan is the most attractive option for first-time\nflippersAdditional\nexpenses like insurance, utilities, maintenance, taxes, etc.\n\n\n\nStep 3: Devise an Action Plan\n\n\n\nBefore\nmoney exchanges hands or you sign documents have a solid action plan. This will\nhelp in cutting down incidental costs and keep your team focused, too. Having a\nsingular goal with a dedicated timeline will help you complete the project\nfaster. \n\n\n\nInclude\nthe following in your action plan:\n\n\n\nBuilding\nthe appropriate fix and flip teamChoosing\nthe correct neighborhood for your first projectRegistering\nthe house flipping company and opening a bank account Setting\nup marketing operations \n\n\n\nStep 4: Secure Financing \n\n\n\n\n\n\n\nHaving\nthe right financial partner can make or break your business. If you don\u2019t have\nenough cash lying around to complete your first house flipping, the next best\nsolution is to consult a hard money lender. They offer faster approvals and\nfunding times compared to traditional mortgages. Besides, you can even get a\nloan if your credit score isn\u2019t stellar. \n\n\n\nThings to keep in mind:\n\n\n\nChoose\na hard money lender who has a successful record of helping local borrowers like\nyou. Since\nyou want to move quickly in this business, choose someone with speed and\nresponsivenessLastly,\nensure that the borrowing process is simple and transparent \n\n\n\nBest Practices to be a\nSuccessful Fix and Flipper:\n\n\n\n\n\n\n\nCommit\nto your business plan, in spite of the curveballs that may come with every stepGrow\nyour network by fostering relationships with industry professionals Make\nestimates and keep room for flexibility. Timelines and costs can change many\ntimes during the processBe\ncautious about your projections and do your due diligence before putting\noutside capital on the line \n\n\n\nGetting\nstarted as a fix and flipper is the first step towards a prosperous and\nsuccessful future. With the right financial backing and professional support,\nyou can surely make your mark in the industry. \n\n\n\nAll the best!\n\n\n\nAuthor Bio: \n\n\n\nGauntlet is a New York based private funding group comprised of experienced and knowledgeable industry professionals who specialize in direct private lending and distressed asset financing.