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 A contractor (or general contractor) is the boss. This person manages the budget and workflow, hires subcontractors, coordinates the work from start to finish, and hands you the bill.

 Subcontractors perform specific tasks, such as wiring, plumbing, and installing ductwork. When you hire a subcontractor to do a specific job, you’re acting as the contractor yourself.

Chapter 4

IN THIS CHAPTER

Grasping the importance of buying with cash

Unlocking your own resources for cash

Getting a handle on leverage

Locating lenders and comparing their rates and terms

Rule No. 1: Never lose money. Rule No. 2: Never forget rule No.1.

— WARREN BUFFETT

Flipping houses is an expensive hobby. You need money — investment capital — to finance the purchase of a house, perform renovations, pay the utilities and taxes, sell the home, and cover your living expenses while you’re hard at work. The good news is that it doesn’t all have to be your money. You can borrow against the equity in your home, persuade family and friends to front you some money, find eager investors who are willing to finance your venture in exchange for a cut of the proceeds, and maybe even finance the purchase of the house through the seller.