Tip #1. Know your market. Unless you practice real estate regularly or have been in the rehab business, this will take time. Consult a real estate professional to learn what the going market for your target properties is. For example, choose what type of homes you're going to flip, i.e. single-family homes, condos, two-flats, and see if how the market is treating those particular properties. An agent will also help you locate under market value homes of potential.

Tip #2. Never pay top dollar. Your money made is on the buy, not the sell. To be successful with this, you need to understand what the current market value in the immediate area surrounding the property, and what homes are getting with the needed repairs. Estimate that you will want to spend about 10 - 15% under market depending on the level of work needed.

Tip #3. Have your money ready. Talk to a loan officer or bank that offers programs geared toward rehabbing. By getting your finances in shape, you put yourself in a better negotiating position and will have a very clear idea of what your target price points are.

Tip #4. Have your team ready. Rehabbers who know what work they can do on their own and what needs to be contracted out save money. It’s always smart to have a licensed electrician, plumber, carpenter, drywaller, HVAC professional, flooring, and masonry people on hand. Negotiate fees upfront -- an offer of future business will help keep your overhead low. Time is literally money with flips, and having your team ready to disperse quickly will minimize your holding time and costs.

Tip #5. Estimate and budget your costs accordingly. This is where planning is critical. Having a good idea of what it would cost to replace a kitchen, a bath, upgrade a property with central air, wood flooring, etc. is important so do your homework. Spend some time at Lowe's and make yourself a cost list, then plan on 40 - 50% more of the total cost for installation or professional servicing if it is something that you cannot do yourself. Don’t forget to factor in tools necessary to do the job if you are doing it yourself.

Tip #6. Estimate that you will probably look at 20 - 30 properties before finding just one that fits the budget. You also can estimate that you will bid and lose on many potential properties before getting an accepted one. Remember, you are not spending top market dollar here.

Tip #7. Spend the time to immediately get your inspection done to have an idea of overall work needed and make your offer contingent upon that and an appraisal. The money spent on an inspection is worth it if it saves you hundreds if not thousands of dollars from buying a property with a considerable amount of damage or needed repair.

Tip #8. Cosmetic repairs can do wonders for your bottom line if done wisely. Never exceed the expectation of the market, nor rely on cheap repairs to yield a healthy return. If you are rehabbing in a marketplace that expects granite and stainless steel, then it’s best to do it. If you are appealing to an area with a healthy supply of starter homes than smart, clean upgrades will work best. Middle of the road attracts a larger audience since top of the line is costly, and people appreciate and will pay for a turnkey home. You are marketing a property to appeal to a lifestyle, so work closely with your Realtor to best meet those needs.

Tip #9. Add yourself on the list to the county record of deeds office for notices of city claimed properties for sale. This means that there are homes that come on the market at potential savings when acquired by the city from those who have past on and have no heirs. Be prepared to come to these sales with only one day to view the properties on the list and you will need to have at least 10% of the property value to secure it. This is where having a close relationship with a lender is a good idea and plan on shopping with a loan commitment versus a pre-approval.

Tip #10. Never overlook estate sales. These are good opportunities to acquire properties that most often need considerable updating and hopefully, few repairs but can be a considerable savings especially when the family members wish to expedite a sale in order to move on.

Julie Woodward-Trenker, ABR, ASP, RFS, e-PRO, Coldwell Banker Residential Brokerage