A great way to earn quick cash is flipping. However, you may run into the risk of buying a property at a high price point right before the market takes a downturn. You will be stuck with a lot of money invested in a house that you will find quite hard to sell if home values fall while you’re doing the renovations. You may want to take time to run realistic numbers before you venture into fix and flip territory.
Only Eligible Prospects
One important rule to making a profit with fix and flip properties is to wait until your renovated home is in move-in condition before you put the house on the market. Otherwise, you may have to incur more expenses that will eat into possible profits and your time when potential buyers request for customization. Dealing with pre-qualified buyers will give you the best results. It will still cost you money if your house isn’t attracting a buyer or isn’t flipping. Instead of watching potential profits evaporating each month, consider renting it out, perhaps with an option to buy.
Design for Selling
Your goal is to appeal to a broad range of potential buyers by using a conservative or neutral color scheme when you’re remodeling a house. Window and garage door replacement, as well as minor kitchen renovations, are essential upgrades as far as value for money. Though it’s vital to know your limitations, you can do much of the work yourself if you’re handy. Ultimately, instead of a do-it-yourselfer, the renovation must have a professional look to attract buyers.
Do the Math
Even if it is cheap, the purchase price is just the beginning. For you to sell the house reasonably quickly when the work is complete, it’s crucial you know the cost of fixing up the property. You will need honest estimates from reliable contractors when building relationships with them regarding the budget and necessary work. The total price, including renovations and original purchase, needs to come in at a minimum of 20 percent less than the same houses in the neighborhood to figure out whether this potential fix and flip are worthwhile.
The Importance of Location
Though it still holds when it comes to flipping properties, the mantra of real estate is location, location, location! Instead of investing in what appears to be a good deal in an iffy area, look for properties in established or up-and-coming neighborhoods. Also, never rush into purchasing, whether you’re dealing with run-down properties or foreclosures. Before you decide to buy, inspect as you walk through the properties as thoroughly as possible. You can also start with relatively familiar areas before you branch out into out-of-state markets. When you’re closer to home, you are more likely to be familiar with the type of property in demand.
Hard Money Lenders for Real Estate Investors
With HardMoneyMan.com LLC, you don’t have to worry about a fix and flip loan for your next project as a real estate investor, and we won’t charge junk fees on our rehab/construction loans. With our new rehab program, you can roll your rehab/construction loan directly into the long term.