6 Tips On Flipping A House
By Kurt Real Estate Nov 23, 2019
As a follow-up to our last blog, 7 Tips to Making the Right Real Estate Investment, we wanted to bring you some tips on flipping a house. Many investors will go the route of buying a “fixer-upper” and flipping it to make a profit. While this type of investment can be fruitful, it isn’t easy. It’s wisest to have some experience under your belt and educate yourself on how to do so effectively. This leads us to tip #1…
#1 Educate yourself. Understand the market inside and out. Ask yourself what kind of property you want to buy. Since you’re flipping, an up-and-coming neighborhood should not be your focus. You’re looking to sell fast so choose the area wisely.
Do your research on all available financing options. How are you going to be purchasing this property? You should know thisbefore applying for a loan.
Learn how to negotiate. If you don’t negotiate in your work or daily life, you are going to want to hone in on your negotiation skills. Your goal in flipping is to get the most for your money.
Know how to identify what a good deal is and research the cost for any and all improvements that may need to be made.
Build a network of contractors. The best way to go about flipping a house is using people you trust that you know will get the job done, do exceptional work, and charge you the fairest rate.
Understand which upgrades are worthwhile and will actually improve the value of the house to cover the cost.
#2 Find a mentor. Like aforementioned, it’s wisest to have some experience under your belt before you start flipping homes. Find someone in the industry that has experience flipping and learn from them. Go in on a deal with them so you too can partake in the work, learn, and earn some of the profit.
#3 Analyze listings and foreclosures. Foreclosures can be a great way for you to get the most for your money but it is important that you do some preliminary research first. If you find a foreclosed home you’re interested in buying, do a background check on the property. By using a site like BuildFax, you can obtain a detailed history of any property and see what changes and improvements have been made.
#4 Make an offer. Once you’ve narrowed down which property will get you the most bang for your buck, prepare an offer. Remember, there can be a lot of competition with fixer-uppers. The owners may have multiple offers so you don’t want to come in so low that it could be taken the wrong way (See 10 Tips for Buying a Home).
#5 Go to work. This can be the most difficult and time consuming part of the process. Don’t let the work overwhelm you. By now you should have determined which improvement projects are worth doing, you know how much they are going to cost and have budgeted out for them, and you already have your contractors lined up and ready to go. Keep in mind, you do need permits before beginning a remodel. Not having these permits or having the incorrect ones can seriously delay your project. Make sure you know what permits you will need, purchase them as soon as the sale closes, and display them where the city inspector can visibly see.
#6 List/Sell. It all comes down to this. Listing and selling the house is exciting and stressful. To reduce the stress of trying to sell on your own, many flippers will use a realtor to sell the house for them. This will help you sell quickly, price it right, and get you the most for your money (See 7 Advantages to Using a Realtor).
If you’re seriously considering flipping a house or just generally investing in real estate, also check out Why You Should Invest in Real Estate.
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