I read an article this morning that provided five tips to be a successful flipper. The piece was about 500 words or so, a relatively easy read and the advice was certainly sound enough to qualify as good information. I won’t reference the site nor the author but the five “tips” talked about doing the math,Leave the analysis to the pros knowing your market, know your buyers, advise of the repairs and price the property correctly. Simple enough, right? But let’s take a closer look and you’ll see why investing in real estate can’t be reduced to a 500 word “how to” guide.

Do the math. Go ahead. Calculate the buy price and determine what needs to be repaired. Consider labor costs, material, financing, taxes and utilities. If you have enough cash and credit available, start shopping for the home based upon your financial profile. The problem here is obvious. You can’t tailor a property to your own situation. You need to find a property and then do the math, not the other way around.

Know your market. Again, good advice. But how well do you know the market? Do you have access to the local multiple listing service? Are you able to properly price a before-and-after project? If you’re as seasoned real estate agent, sure. But if you’re not, you need to find some help.

Know your buyer is helpful. You need to know who your buyers will be and then tailor the home around their potential needs. Yet what you really need to know is the area in which your project is located. The types of buyers for a flip are the ones who are already living in the neighborhood. If you know your market thoroughly, your buyers will show up.

You need to let your buyers know what’s been replaced and repaired. The appraiser will also want to know that as well. When you buy the property it’s already priced below market. Why? If you can’t document what was wrong with the home and what you did to remediate the problem you may have some valuation issues come appraisal time.

Finally, make sure you price the property correctly. This again goes back to “Know your market” and if you don’t know your market and what properties are selling for, this advice is relatively tame.

The bottom line is simply this — Investing in real estate can create wealth and monthly cash flow but it’s not for someone without the experienced needed to properly evaluate, repair and market a home for a profit. Let others do the work for you and all you need to do is decide if the investment is right for you.