Flipping a house can be a wonderful way to enter the real estate investment game. Whether you’re a builder, a developer, or an investor who is ready to start buying cheap properties, fixing them up, and selling them for a major profit, it’s a process that can be exciting, rewarding, and at times stressful.
We’ve found that several key secrets can help you get much more success from your efforts at flipping homes. Here are some of the key things you’ll want to keep in mind in order to get the best outcome.
- Know Your Limits – We’re talking about your full purchase limits here, often called ‘max purchase price’. Think of all the costs you’ll have to deal with when buying a flip property. Consider purchase price, closing costs, taxes, and other fees, and the cost of improving and repairing the home. That’s the maximum amount you can spend – total. Set it and never go over it, no matter what kind of property you find. You have a limit, so know what it is and never exceed it.
- Know How To Roll With The Punches – Part of flipping a home is being ready when something doesn’t go the way you thought it would. Maybe it’s a sudden expense you weren’t expecting. Maybe it’s a safety hazard you found that wasn’t apparent. Being able to identify problems and adjust your plan when they arise is important.
- Know Your Financing Options – This goes with the one above. If unexpected issues arise, having emergency financing at the ready is important. This could be savings accounts, but often turning to private money lenders and hard money loans is a better option when you’re in a bind.
- Buy Smart, Sell Smarter – Making the right purchase is a big part of getting the best results when you flip a home. But you also need to sell smart. If the market is tanked and you can afford it, don’t hesitate to sit on a property for a year until the values and market go up. Know how to determine when it’s the right time to sell and when you may get more from renting a property. All in all, selling smart is just as important as buying wisely.
It really comes down to knowing your capabilities and limits, and being able to adjust plans as problems arise. Set your spending limit and know how to go about securing hard money loans for those sudden moments when you need money fast. If you’ll keep those basic things in mind you’ll be able to enter the flipping game and find serious success.