If you’re anything like me, your first few property flips will be a balancing act of excitement and the thrill of doing something new, along with the fact that it can be a little frightening and intimidating.

You might not admit it out loud, but you will feel it.

I’m an IT professional at my core, have been for over 20 years, so risk avoidance and mitigation is key to everything I do, and so I like to remove those fears and often fall into the fear trap of procrastination.

However, when it comes to building my retirement fund, I knew it was going to take a few leaps of faith and a bold step or two.

 Property Flipping in South Africa

Property fix and flip
Sometimes, all it takes is a good clear out and some new cupboards

When property flipping in South Africa, most people feel several times during their first property flip that they have gotten in way over their heads.

It feels as if things are moving fast, dates and deadlines are moving closer and closer, and you will no doubt worry about how much money you are going to lose.

Yes, you read that correctly. In those first few property flipping trial runs, you will focus on the potential loss more than you will the potential gain. It’s weird and strange but very true.

Cash flow positive property investing dreams and thoughts go right out the window on your first property flipping experience, and instead it’s replaced with that inner gremlin of “What if this doesn’t go as planned and something goes wrong?”

The truth is that it will take more than a few property flipping trial runs to feel comfortable with the process.

Most people make very little, if any real profit on their first property flip and write it off as a learning experience only to enter into the next flip with newly learned lessons and a positive attitude. And bigger cashflow returns.

What is property flipping and how to learn it?

Learning the ABCs of property flipping houses is a great place to begin and can help you avoid costly mistakes made by many first-time flippers – To help you with this, I’d suggest getting hold of Gary Keller’s book on “Flipping” to get that started.

In fact, I’d recommend any of his books for his pragmatic and systematic approach to life and business. He’s the K in Keller Williams real estate and a master businessman.

Over the years, I’ve learned that when it comes to making money in the business of property flipping and other real estate investments you will find all kinds of do’s and don’ts along the way.

The truth of the matter is that these are extremely useful whether this is your first house flip or you have been property flipping for years.

So these are my hard and fast rules I have when it comes to flipping.

Also read: 5 Steps to become a property investor (with no money down)

Michael Bowen’s 5 Property Flipping Do’s and Don’t’s

1 Analyse the neighbourhood 

Don’t forget to check out the neighborhood before you buy using all the technology you can to find out what would make a buyer want to live there including access to transport, great schools, security etc. Resources for this include:

a. Google maps

b. https://www.lightstoneproperty.co.za/

c. https://www.tpn.co.za/group

2 What buyers do NOT want

Do check out what would make a buyer not want to live there including slow degradation of prices over the years, closure of schools and business, illegal squatters and property hijacking etc.

One property flipping option we looked at, was perfect in its location, access to transport etc., but illegal squatters hijacked a property nearby resulting in crime increasing, which resulted in buyers being put off. Resources for looking at these trends include:

a. https://www.crimestatssa.com/index.php

3 Protect your budget at all times

Don’t blow your budget without just cause.

Your budget is what you use to determine whether or not the house would be a profitable venture.

If you blow your budget and cannot recover the extra money you’ve spent in the selling price on the house you will have seriously cut into your profits if not eliminated them all together.

The goal in house flipping is to get in and out quickly and spend as little money as possible in order to make as much money as possible.

It’s why I like Back-to-Back deals so much… we get in, do minor cosmetic repairs to make it shine, and sell it on without owning it for more than a few minutes.

It’s Low risk, nice rewards, more pension money built up and it’s how to flip houses with no money … Or at the very least not your own Money.

4 Inspect everything about the property

Do look under the ground, in the ceiling, on the roof, and under the floors.

Be picky, be pedantic and you will discover issues that you can use to either reduce the price, or get the owner to fix at his cost before taking it on.

Do this especially if the owner is an armchair electrician, plumber, or builder. You will find this out by asking the owner some probing questions on what work he has personally done to the house – Most will start to brag about the additional unit they built with blood sweat and tears, or how they figured out how to do things themselves etc.

If it’s a freehold property, it’s at this point that I bring in my property flipping inspector Marisia Robus from https://gautenginspect.co.za/

Additionally, Check out this video for what we discovered when we started asking the caretaker some probing questions:

5 Curb appeal matters

Don’t neglect the exterior in your budget. Curb appeal is what brings buyers into the property.

If you spend all your money, time, and effort making improvements to the interior of the home you will have little left to make the outside appealing to potential buyers.

A home buyer is in the market for the entire package. A home that looks run down on the outside leaves the impression of being neglected on the inside and many potential buyers will never walk inside if the outside looks forlorn.

If you’re renovating old houses or newer ones, resurface bathroom fixtures rather than replacing them if possible. Instead of replacing cabinet doors or hardware, recoat or paint them and save that money for the outside and entrance to the unit.

I’ve learned most of this, and more, through experience and education. It has me taken 20 years of doing this to be comfortable with it, and yes, I still get edgy and nervous from time to time… It’s part of the process.

Can you get rich from property flipping houses?

Yes, but that does not guarantee wealth.

For that you will need to append your property flipping with Buy to lets to ensure a steady income stream coming in. For every 3 flips buy 1 buy-to-hold. More on that next time. 

If you’d like experience on how to flip a house with no experience – I’d say wait. And don’t.

Rather come and join us for your first few and earn fixed returns of 10% to 15% whilst watching how we do this. Lower your risk, gain experience and then go for it yourself! 

To sign up and hear about our next investments click here https://meetmichaelbowen.com/investing/

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