Flipping a house for profit seems like a daunting prospect, but as Egypt Sherrod can attest, there's a method to the madness.
Sherrod, who you might recognize as the host of HGTV's "Property Virgins," is now teaching first-time flippers the tricks of the trade on her brand-new HGTV series "Flipping Virgins."
"This is where I get to teach people how to successfully flip houses for profit," says Sherrod in an exclusive interview with FNM. "There is a rhyme and reason; there is a formula to flipping. And that's what you learn on the show."
So what's her secret? For starters, Sherrod says investors should be able to recognize a decent, flippable piece of property. "When looking for a home that you want to flip, you want to make sure that it's not so trashed that you can't get a profit on the back end," she says.
"I stick with a formula: a third, a third and a third," she adds, explaining that she'll only purchase a fixer-upper for a third of what she hopes the ARV (after-reno value) will amount to. "By the time you renovate, whatever money you've put out, you've still stayed under two-thirds, so your profit is a third," she says.
"Even if you wind up getting less than that third, you've left enough buffer for yourself to make a profit."
Watch the rest of our exclusive interview with Sherrod for more "Flipping" tips and tricks, then tune in for new episodes of "Flipping Virgins" on HGTV, every Tuesday night at 11 p.m. ET.