The home remodeling industry grew by almost 4% every year, between 2008 and 2013, and it generates about $52 billion in revenue per year.
Why? Who is buying that many buckets of paint or that much tile flooring?
The success of the house remodeling industry is likely due to the popularity of one lucrative investing practice that has become a popular part of American culture. Flipping houses has found a niche, not only because we enjoy watching things transform (as is indicated by shows like Extreme Makeover: Home Edition and Flip This House), but we also like to make money as creatively as we can.
If you’re thinking about becoming a house flipper — someone who buys homes with the goal to remodel and resell them — but don’t have the funds to start, here’s how to start flipping houses with no money (spoiler: find some).
1. Find a partner
Since house flips usually take a bit more money that you probably have saved, you’ll want to find some source to help you out.
Rather than going the traditional route and immediately heading to a bank, you should consider consulting with someone you already know and have a relationship with. They provide whatever funding you need, and you split to profits in half. They get the advantage of the return with little effort, and you’re able to make the flip.
2. Go the traditional banking route
If you don’t know anyone that can help put up the cash for a flip, your next option might be to head to the bank and see what kind of loans you can get. Though this might be a less desirable option especially if you have little or bad credit, it’s worth looking into.
3. Borrow from a hard money lender
A hard money lender will lend cash to you typically at a higher interest rate.
If your potential flip can be done very quickly, this might be a good option since the interest won’t have a chance to accumulate too much and you still get to make the flip.
If you’re new to flipping houses, you really need to do your research to learn more about the process, relevant tax and legal matters, and to get some tips to make each flip go as smoothly as possible. Look for guides on how to start flipping houses or just a list of house flipping tips.
If you don’t know how to start flipping houses without money, that’s probably because it can be pretty tough. Find some funding before you get started.
Do you have any suggestions for finding funding for house flipping? Let us know in the comments.