Does the idea of flipping houses sound exciting and lucrative? For many individuals, the thought of flipping a home and making a mammoth profit for only a few months’ worth of work sounds too tempting. The problem is that if you don’t know what you are doing, you could easily lose in the house flipping game.

Regardless of what late-night infomercials want you to believe, there is no secret to house flipping, and it takes great skill to flip a house to make a tremendous profit. Flipping real estate takes time, patience and a great deal of knowledge about the business.

The first step to successfully flipping houses is to understand how much time, energy and money is involved. Once you have a firm grasp of what is needed for flipping real estate, you will want to know what NOT to do when flipping houses.

The following lists details the top five things to avoid when flipping houses:

1. Do not purchase a property if you haven’t first researched the neighborhood. It is important to remember that all neighborhoods are not created equal. In other words, just because a nearby community has seen an increase in property values doesn’t mean that the community in question has as well. You must research the neighborhood’s property values and its real estate market and trends, just to name a few, before flipping real estate there.

2. Do not purchase a property without having a budget in mind. Your budget will revolve around the financing you receive to purchase the property. Because of the recent real estate bust and credit crunch, do not expect to secure financing without a healthy down payment. Remember: the bigger the down payment, the lower your interest rate will be.

3. If you are new to flipping real estate, avoid homes that need extensive, structural repairs, as this can often get you in quickly over your head. Leave the major rehabs to the seasoned real estate flippers and instead look for homes that require cosmetic makeovers.

4. Don’t get emotional when flipping houses. One of the biggest mistakes real estate investors can make is not separating their emotions from their flips. Remember: at the end of the day, flipping real estate is just business!

5. Don’t expect the process to always go smoothly. Having high expectation when flipping houses will not prepare you to handle problems, chaos and budget overages, which frequently happen when flipping real estate.

Flipping real estate can be a lucrative endeavor, but it takes excellent business acumen, hard work, and excellent financial management.