In the previous posts, we have discussed how you need to do your research before getting into flipping houses.  This part will continue to emphasize that fact, but also get into how you can get started and if it is really right for you.

At the point you are ready for a purchase, you should have worked hard to find the perfect property and so it is time to get down to business.  One of the biggest mistakes that flippers tend to make is buying and renovating to their own personal needs or tastes.  As with any other investment, you need to keep your "emotions" out of it.

By that, I mean that whatever you think is needed is not what everyone else thinks.  You need to prepare the home for resale in a fashion that will be attractive to as many people as possible, and more than likely, they do not have the same tastes as you.

There are some specific ways you can prepare your home for resale.  Start off with defining your target buyer and what they would expect or want.  Part of your research should have included the types of people buying in that neighborhood, so it should be relatively easy to see what those buyers want. 

Research trends in home decorating and design.  Check out what people tend to be doing for their own renovations, but also visit some local model homes to get some ideas as well.  Already having upgraded kitchens, appliances, etc. that people like will be a plus, keeping in mind your target buyer.

Don't forget to focus on the outside of the home, not just the inside.  Remember that you cannot show off a beautiful kitchen or bath if the buyer doesn't even want to get out of their car.  Curbside appeal is a must for a successful sale.  Also, when renovating the inside, keep colors of paint and appliances neutral to attract the most buyers.  Model homes can help in choosing patterns as well as they tend to use neutral colors and decor that can present well. 

So, now that you have seen how much work needs to be completed in order to achieve a successful sale, is it right for you?  This is a question that can only be answered after careful research.  Remember that there is more to consider than just the acts of buying, renovating, and reselling the property.

You will need to calculate the amount of time the investment may take.  Part of the calculations need to include your ability to turn the property around in a profitable time frame.  Financially, does it make sense and can it realistically be done?

Money is another big factor in determining if flipping is right for you.  Do you have enough money to handle the costs of the renovations?  You also have to look at the downsides.  What will not making a profit, or even losing money, do to you financially?  Can you handle a loss and recover from it quickly?

One item that investors tend to overlook as well is the tax implications of the flip.  How much of your profits are you going to "lose" in the form of taxes?  Have you talked with your accountant, financial advisor, and even mortgage planner about taxes and strategies to make the most profitable deal?

As you can see, there is a lot of research that needs to be done before you start flipping homes.  Flipping is a risky investment but can be very rewarding if you do your homework.  As with most investments, the planning and preparation is what determines your success.  Remember, that profits made in flipping, like most other investments, are made on the purchase, not on the sale.

In case you missed the first two parts, here are their links...

Heads or Tails: Is Flipping Houses Right for You? (Part 1 of 3)
Heads or Tails: Is Flipping Houses Right for You? (Part 2 of 3)