HOME flipping can make the right person some serious cash.
Under this type of side hustle, buyers look to purchase a home and upgrade with the intention of re-selling it for profit.
So of course, you are taking a risk of losing money by selling the property for less than what you paid for it originally.
Also, there’s always the risk of a market crash, which may result in having to sell at a loss or getting stuck with an unwanted property.
She called this her “biggest success story”.
How she did it
The first thing to note is Ms Liu had some help with a contractor.
Both of them bought a home in Fort Worth, Texas, for $600,000.
In addition to this seeming like a hefty price to pay – there was a lot of work that needed to be done.
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For example, the home came with the following problems that needed to be addressed, according to Business of Home:
- Old plumbing
- Rotting wood
- Broken windows
- Exposed wires
However, the two home experts saw the upside and spent $250,000 on renovating the property.
They wound up selling it for $1.1million – and raking in a quarter of a million dollars in profit.
One of the most important things that Ms Liu emphasized was finding the right team to work with during the entire process.
This includes finding reliable tradespeople, and real estate agents in addition to contractors.
“Look to work with people who are transparent in their billing and reliable when it comes to showing up when they say they will — unless you want to spend the entire day on the job site managing the project,” Ms Liu said.
“The longer the construction takes, the more money it costs.”
Meanwhile, Ms Liu also said to be prepared to fail.
We are all human in the sense that we experience and learn from past mistakes.
Ms Liu’s biggest mistake in her career was over re-designing a ranch-style house.
In particular, she valued her own aesthetic views over what the market demanded.
“If you’re not familiar with what the neighborhood can command in terms of price, an agent should be the first stop in finding out what the comps are in that area,” Ms Liu said.
To add to that point, Massachusetts-based designer Karen Goodman recommends walk-throughs on a home of interest so you can better understand the rates for various types of homes and their styles.
And if you can’t find a home for the right price, Ms Goodman said to look elsewhere.
If you buy and sell homes at a profit, keep in mind that you're usually subject to capital gains tax, depending on income.
For more related stories, see how a real estate investor made $70,000 without using any of his own money.
Also, here are the common mistakes of real estate investing.