Flipping houses can be a path to wealth if you play your cards right, but it can also result in money pits and small returns if you don't know what you're doing. Before you get ready to flip your first house, make sure you're considering (and finding answers to) all of the following questions.

What’s your upper limit on purchase price?

• There’s always a cap to any sales price you can get

• A flip will always need at least some work

• This means you need to find an amazing deal to make money

   

How will you find the best deals?

• Divorce court

• Probate court

• Foreclosed homes

• Look for homes that are sound but need cosmetic work

• No major repairs: plumbing, electrical, foundation

   

Should you get an inspection?

• Even if you’re paying cash, it’s a good idea

• Ask the inspector to focus on major issues

• Get a sense for outdated or noncompliant features or systems

   

Which improvements can you tackle personally?

• Hanging drywall

• Painting

• Installing cabinetry

• Nothing?

   

Who's going to help you?

• What improvements can’t you handle?

• Look for people to fill the gaps

• Ask about rates and availability

• Pay them on time

• Maintain good relationships

   

What's your timeframe?

• This will depend on what needs to be done

• Build in time for each task plus wiggle room

• Bad weather

• Missing supplies

• Illness

   

Does the market matter?

• Markets with robust price growth tend to yield low returns, but ...

• Try to find markets where homes are moving more or less quickly

   

What will you do to balance your portfolio?

• Successful flippers diversify their real estate investments

• Will you venture into becoming a buy-and-hold landlord?

• Will you offer lease options to renters?

• This way, a bad flip won’t sink you

   

Can you juggle multiple deals at once?

• You’re only as good as your next deal

• You’ll to line up the next project while you wrap your current flip

   

Can you think like an investor instead of a homeowner?

• Don’t get carried away with upgrades

• Use materials that are classic and long-lasting

• Offer wide appeal without sacrificing much quality