Whether you are new to real estate investing to buy and hold, flipping a home for profit or just rehabbing, it could be your path to a huge retirement and the most rewarding financial freedom you have ever seen. It is imperative, however, that you are wise about gathering all of the quality house flipping tips you can. The timing is perfect for flipping houses through REI Investors Training and Coaching Society Website. Some of the most important house flipping tips you can tap into will deal with timing, staying organized, knowing your market, analyzing which projects and upgrades will actually help to increase home values and which don’t. Real estate investing is not about taking chances, it is about knowing the direction you are headed. Learn as many house flipping tips as you can before you start and you are likely to take a huge risk and loss. Here is 10 tips to help you succeed in house flipping.
1. Do the math
Figure out what you can spend on both the house and the renovation, down to the last dollar, and include how much risk you are prepared to take. Price out the cost of carrying a short-term loan (if you need one), taxes, utilities and maintenance on the home for up to a year. Price out your material costs and labor. Look at comparable sales in the market to see what the likely sale price will be and don’t expect a penny over. Once you have a financial plan in front of you, with a reasonable margin for risk, begin shopping for homes that meet that budget. Don’t let a huge fixer-upper with potentially larger returns muddle your math.
2. Know your market
Is this an already established area with rising prices? Is it a transitional neighborhood with good potential that may not be quite “there” yet? Is this an area with good schools that will attract families? Is this a community popular with retirees? Knowing your market will help you to choose the most desirable home and it should help you know what your profit margin will be. Every neighborhood has a not-to-exceed price. Know what that is. Doing your homework on recent sales and average days on market can give you an idea of how long to hold the property before flipping. Perhaps you want to rent it for a year or two until the neighborhood really takes off, or do a quick renovation because the neighborhood is very competitive.
3. Know your buyer and renovate with that buyer in mind
If this is a neighborhood with good schools, then your buyer is a young family. Older homes may not have the open kitchen/family room that these buyers demand. Spend your money making the family space open and inviting. Make sure there are enough bathrooms for kids and invest in a Jack and Jill vanity in the hallway bath. Finish the basement if possible. Don’t focus too much on the master suite, but make sure mom and dad do have their own bathroom. If this is a retirement area, look for a home with just one main level or a ranch style. If there are stairways, open them up and widen tight spaces. Make sure the home is easily accessible from the street—no big stairways up to the front door. And turn the yard into a patio for a maintenance-free outdoors.
4. Put Your Team Together
Build a team to flip your house. Once you have a plan set up, you can start building the team that will flip the house. This will allow you to have the team that you need even before anything is started. Shop around for companies that offer the services that you want so that you know which ones you should hire. Keep a list of companies that you know you will need and are worth hiring. You won’t want to immediately hire someone just because you already need it within the week.
Set up your team and start with the work as soon as you can. Talk with at least 3 different contractors, before making a final decision. Once everyone agrees with an estimated completion date and timeline schedule make sure everyone sticks to it. This way, you will pay only a few months’ worth of mortgage before you can finally put the house in the market.
5. Don’t overprice
It’s tempting to look at your renovation, love what you’ve done, factor in all the sweat equity and overvalue the home. Every neighborhood has a general price point, and you need to stay within it. Underpricing slightly could result in multiple offers and a final sale price above asking.