After getting stuck in a 9-5 job that would never deliver financial freedom, Elisa Covington decided to go all in with house flipping. Since making the switch, she has established an impressive track record of over 60 projects, many of which have yielded six-figure profits. In the process, she has become a beacon of knowledge for other investors aspiring to make it big in the industry.
In this article, Elisa shares some of her tried and trusted tips for flipping houses successfully, unveiling the strategies that have propelled her to the upper echelons of this industry.
Tip 1: Always Make Money on the Purchase 💰
The true value add in house flipping doesn’t solely lie in the renovation process. Instead, the key to generating substantial profits lies in purchasing properties at a discounted price, creating instant equity and shielding oneself from market exposures.
When done successfully, you should be able to purchase a house and sell it for a profit, without making any renovations. This is one of the hallmarks of micro flipping, an investing strategy that requires little-to-no renovations
The underlying point is that you need to build a substantial profit margin into the deal from the get go. If you don’t abide by this house flipping rule, you may introduce the possibility of losing money if things don’t go perfectly to plan.
Tip 2: Always Evaluate Deals Yourself 📊
A detailed evaluation of each deal is absolutely crucial when flipping houses, no matter how busy you are or how improbable a deal appears. External influences from agents, wholesalers, and home sellers can often skew judgment, driven by their own interests.
Many beginners make the mistake of being easily swayed by others due to a lack of confidence in their own analysis. When uncertain about the numbers, consulting a coach or mentor can be very helpful when you need someone to double-check the numbers. Finding a real estate investing mentor with aligned goals ensures reliable and supportive advice, which is critical for success.
Bonus Tip – New Silver’s House Flipping Calculator can help you analyze the profitability of a deal. In addition, our free ARV Calculator can help you analyze neighborhood comps.
Tip 3: Analyze Deals with the Worst-Case Scenario in Mind ⚠️
While many inexperienced investors focus on the potential profits of a deal, a seasoned flipper always considers the worst-case scenario. You need to analyze what could go wrong, such as project mishaps or market changes, and calculate potential losses or break-even points. This approach prepares you for unexpected challenges.
Potential pitfalls include renovation budget overruns, contractor issues, permitting delays, and market condition changes. By budgeting extra for holding costs and unforeseen expenses, you will be able to cover additional costs and maintain the profitability of the deal.
Tip 4: Design with the Buyer in Mind🏡
Understanding the target buyer is crucial in house flipping. Knowing what buyers want and are willing to pay for must be the guiding force in the design and renovation process. Designing based on personal preferences can lead to costly mistakes if your preferences don’t align with the target market’s desires.
For example, young, single buyers might prioritize open living spaces, while families might value more bedrooms. Additionally, identifying which upgrades are valuable to buyers prevents unnecessary spending. Ultimately, designing with the buyer in mind ensures that upgrades add real value, enhancing the profitability of each flip.
Tip 5: Package Your Flips for Maximum Appeal 💼
Presentation is key when selling a flip. Elisa’s strategy involves buying the worst house on the block and transforming it into the best-looking one. Fresh landscaping, professional staging, and high-quality photography significantly enhance a home’s appeal, attracting more buyers and commanding a higher sale price.
While these enhancements require upfront investment, they are well worth it. A well-packaged home stands out in the market, increasing the likelihood of a quick and profitable sale.
Elisa's Key Insights
– 💰 Making money on the purchase is crucial in house flipping as it provides instant equity and shields against market exposures.
– 📊 Evaluating deals independently is important to avoid being influenced by biased opinions and to ensure accurate numbers.
– ⚠️ Analyzing worst-case scenarios helps in budgeting for unexpected costs, delays, and market condition changes.
– 🏡 Understanding buyer preferences is essential to design a flip that appeals to the target market and maximizes profit.
– 💼 Packaging flips effectively with attractive landscaping, staging, and professional photography enhances the selling potential and attracts more buyers.
About Elisa Covington:
Elisa Zheng Covington is a powerhouse in the world of real estate investment and development. As the founder and CEO of Transform Real Estate Investments LLC, she has built an empire on the back of her unparalleled expertise in the art of the fix-and-flip.
Her razor-sharp business acumen and unwavering determination have propelled her to the forefront of the industry in the highly competitive San Francisco Bay Area market.
With an impressive track record of flipping up to ten houses annually, with many yielding six-figure profits, Covington has masterfully crafted a blueprint for success that sets her apart from the competition. Her innovative tactics, meticulously designed to maximize returns while operating within strict budgetary constraints, have earned her a devoted following of aspiring investors eager to learn from her wealth of knowledge. Through her captivating online presence, including an engaging Instagram account and a highly informative YouTube channel, Covington generously shares her invaluable insights, inspiring and guiding others on their journey to real estate riches.
For those seeking to learn from Elisa’s wealth of experience, the Transform Flipper Academy coaching program offers an opportunity to delve deeper into the intricacies of house flipping and how this path can unlock financial freedom.