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from Oct 2007 issue of Houston Real Estate Experts - FREE subscription

Skills Needed To Have Maximum Success Flipping Real Estate

by Terry Wygal

Many people are drawn to the real estate business because we recognize real estate as an asset that tends to go up in value, and it's a process that most of us understand (at least those of us that have ever bought or sold a home).

Then there are those that realize they have to put food on the table, and when it comes to wholesaling houses, you can draw in upwards of $15,000 to $20,000 in less than 30 days.

However, unlike buying or selling your own house, there are some critical skills that you will need to either have (or will need to develop) in order to reach maximum success in building your real estate flipping business.

Ability to Analyze Deals

The most critical skill you'll need to have, and probably one of the easiest to develop, is the ability to analyze deals. I consider this one of the easiest skills to develop because it mostly just boils down to basic high school math (and you thought you'd never need that stuff). In fact – when done correctly – you should be able to analyze a deal in as little as 2 minutes.

Being able to distinguish a good deal from a bad deal can make the difference between racing out the door to tie up a contract that nets you five figures and avoiding one that costs you six figures down the road.

One of the first things to do when analyzing a deal is to remove all of your emotions out of the equations.

To ensure you're working with all the right info, you'll need to have a solid source for trends on the home values in your area. Hopefully this will come from farming a particular area and being familiar with it or having a knowledgeable real estate professional as part of your team.

If you have not networked with a real estate agent so that they might provide a market analysis for you - then start networking! We will discuss networking skills a few points down. If you still don’t have anyone – then there are several great resources out there in the marketplace that you can subscribe to.

In addition, you'll need to be able to determine which items on a particular property need to be repaired to bring it up to a reasonable market value and a rough ballpark of what those repairs would cost. Be sure to leave room for errors to account for any unforeseen circumstances that might (and often do) come up.

Negotiation Skills

Another thing you'll need to master is the art of negotiation. Negotiation skills can clearly make the difference between generating a huge income and leaving a sizable amount of money on the table.

And while the goal is NOT to play mind games with a seller in order to convince them to sign a contract with you, you DO want to ensure that you're able to build a profitable business that they will grow over time.

One of the biggest flaws I see in new real estate investors is where they begin to negotiate out of emotion – they want to help the seller when there is no deal. They take the seller's problem on as their own. They get caught up in the excitement of the bidding – all of these can be fatal flaws.

These critical negotiating skills will be a part of growing your business when dealing with sellers, contractors or other professionals that you'll come in contact with.

Networking Skills

As with any business, networking skills are critical, and you should continue to build these skills if that's not already one of your strong suits. This too can have a huge impact on your bottom line since you'll likely be relying on other professionals to help you move deals along.

You team must include contractors, closing agents or title companies, real estate agents, attorneys, tax advisers, and so on.

Your local Real Estate Investment club can provide you with the majority of the contacts you will need – and your local real estate investors can tell you the ones to stay clear of.

Marketing Mastery

No business can survive without marketing for new prospects, so good marketing skills are also crucial for building your real estate flipping business. This is true whether it includes using direct mail, classified ads, bandit signs, flyers or other less traditional methods.

There is a strong misconception that you do not need any money to buy real estate – and that is true – but you do need to market for houses, otherwise you phone will be awfully silent.

Some marketing ideas can be much less expensive than others, so see which one fits your budget – but always put a little aside for your next marketing plan when you sell a house.

It's important to have a solid marketing plan in place and hopefully one that works with little input on your part. That will ensure that as you're working deals that come in, your marketing machine is still running and bringing new prospects into your funnel.

You can see that building a real estate flipping business requires a wide range of skills to achieve maximum success. The key is to keep learning and continue to develop the skills necessary to become successful.

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Terry Wygal, The Quick House Buyer

Terry Wygal is a Native Houstonian and has been a full time investor for over 7 years. He has interviewed and developed strong networking partnerships with noted national speakers such as The Apprentice 3rd Season Winner Kendra Todd, A&E’s Flip This House star Than Merrill, David and Armando Montelongo, as well as national motivational speaker Vic Johnson. Terry runs one of the Nation's fastest growing real estate investing training centers at www.TotalFinancialLiberty.com.