The housing market has made a triumphant return and the real estate business is booming. It has many of us wondering how and where we can get in on the action. One of the most lucrative ways to get started is to start flipping houses. If flipping houses was as easy as flipping burgers, we’d all be millionaires. As much as we want to believe it’s as easy as the beautiful couples make it look on HGTV, we all know there is a lot going on behind the scenes that we don’t get to see. Whether you’re a seasoned veteran or looking to get started on flipping houses, here are some things you need to know.
Buy At the Right Price
If you buy a house at full asking price, don’t expect to turn much of a profit or any profit at all. The goal of buying and flipping a house is to buy it at the lowest price you can, so that you can spend enough money on renovations to turn around and sell it for a lot more money. Find out everything you possibly can about the property. You’re going to need every edge and advantage you can get when you begin negotiations on price. The last thing you want is to buy a house and find out there is a lot more wrong with it than you had previously thought.
Find Reliable Finances
Anyone who knows anything about flipping houses knows that you need a solid source for quick financial loans. Whether it’s to purchase a property or you need to go over budget to fix an unforeseen problem with the home, having a reliable hard money lender on standby is a must. At some point in your house flipping career, you are going to make a mistake or miss something that could end up costing a small fortune to fix. Make sure you can bail yourself out when and if you need to.
Hire The Best Contractor You Can Afford
The smartest thing you can do is hire an ace contractor. You want someone who has done and seen it all. It will always be worth it to spend the extra cash on a contractor with extensive knowledge and expertise. If you hire the wrong contractor or one who doesn’t have experience in every aspect of renovation, you could end up hiring multiple contractors to finish different jobs and fix mistakes. When you find a good one, pay him well and hold on to them tight.
Don’t Get Too Fancy
Do a lot with a little. When you start making renovations, make the biggest and best ones you can with the budget you have. Don’t put in too many details like voice activated thermostats or a chandelier. Keep it simple and be smart with your money. Most first time home buyers aren’t looking for anything too crazy and they should be your target buyers when you put the house on the market.
Choose the Right Location
Location is everything when it comes to flipping houses. What you want to do is find a run down home that someone’s grandmother has neglected while the rest of the neighborhood continued to grow and flourish. Finding an old beat up home in an up and coming neighborhood is like winning the lottery. Always try to measure the potential of your renovation. Ask yourself, what is the school district like? What’s the average value of the surrounding homes? Be astute in your observations.
Should You Sell or Hold Onto Your Flip?
You have to decide between renting and selling your fix and flip, and the decision is generally based on the local real estate market. If houses are selling quickly, find a good realtor with experience in the neighborhood you plan to sell the home. If selling proves to be difficult, consider holding onto the property as a rental investment. Finding the right tenants can be difficult, so use a tenant verification service before placing anyone in your newly renovated property. Whichever route you chooose, consider which will provide the money you need to pay off any loans as possible.
Flipping a home can be a lucrative business venture, but it’s not for everyone. Consider the challenges that come with this entrepreneurial move and make the right decision for your skillset and goals.