You may have heard stories about friends or relatives who made thousands of dollars fixing and flipping homes. You may also have seen the television shows featuring house flippers who make tens of thousands of dollars per transaction. While it may look easy on television, flipping homes takes practice and skill. What are a few secrets the smart and successful flippers use to make their large profits?

They Know Their Numbers
Whether you are flipping houses or flipping burgers, you won’t be successful unless you know your numbers. What this means is that you know how much you can spend on a property and its rehab and still make a profit. The best flippers will learn as much as they can about a given home as well as the housing market in that neighborhood before making an offer. Often, they will look at similar homes in the area to figure out how much they can eventually list their rehabbed home for.

They Plan for Every Scenario
Ideally, a home will be bought, fixed and flipped in a few weeks. However, that doesn’t always happen. A good flipper will know what to do in case a house doesn’t sell or it costs more to fix than initially thought. For instance, a flipper may decide to sell the house to another investor or rent the house to recoup extra costs before selling it. In some cases, it may be necessary to rent a home before selling it because the market goes through a down cycle, which may make it impossible to sell for the target asking price.

They Work With Real Estate Agents
Many people believe that working with a real estate agent isn’t in their best interest. While social media and other online marketing tools make it easier to gain visibility for your properties, it still doesn’t match what a real estate agent can do for you. In exchange for paying that three or six percent commission, you can rest easier knowing that your home is more likely to sell in a timely manner and for your asking price. Real estate agents are helpful because they know how to market your property as well as how to handle buyers and their agents throughout the sale process.

They Know When to Cut Their Losses
Not every flip is going to be a successful one, and most flippers know when a flip has turned into a flop. However, there is a difference between knowing the flip is a loser and actually getting out of it. Many novice flippers will hold onto a property hoping that the market will turn around or that they can recoup their costs if they are patient. However, the best flippers understand when a flip won’t be profitable and will sell the house in order to move to their next opportunity.

Flipping homes can be profitable and allow for financial security in your life. However, it is not easy, and you will lose in some cases. Over time, you will learn how to identify good properties to buy, fix and flip for maximum profits. Hopefully, you will also learn to identify when a flip isn’t going well and take action to cut your losses or find new ways to make money with your property.