In urban centers with high demand, like NYC, Miami, Boston, Portland, and Dallas, there is serious money to be made with the right fix-and-flip. Most buyers do not have the skill, time, or courage to take on a run-down property, but if you are an experienced builder, you can take advantage of these deals.
What To Look For
Some beat-up houses are sitting empty and neglected for good reason. They may be in terrible areas with little potential, or they may have serious (and expensive to fix) structural problems like shoddy foundations. You want to focus on houses without serious structural problems that are near to:
- Decent schools
- Shops and other amenities
- Good access in terms of traffic and public transportation
Deals with good potential can often be found in areas that are close to top-rated neighborhoods, and that are ready to take some of the overflow demand. Focus on properties that will fit a young family ready to settle down, and skip the white elephants.
Make A Plan
Once you have a couple of properties picked out, start running some estimates, to see what it will take to move the houses from ramshackle to open house ready. Make sure you do some basic research on the features realtors play up in their ads. Those are the features buyers are looking for, and they will help your finished project fetch top dollar. Consider the possibility of fixing 2 houses at once. If you have the crews, it can be more efficient cost-wise to switch them between 2 sites, especially if the sites are close to each other.
Get The Right Financing
It is no good to start a fix-and-flip project, if you do not have adequate financing in place. If you don’t have the money to both buy the house and fix it, you could end up with a half-finished project sitting empty, until you find the money to complete it. That will obviously cost you and could easily eat up your projected profit. So you need a lender who will look at the whole project and appreciate the value you are adding to the property. Unlike the banks, Hard Money Lenders specialize in this kind of financing. The bank will usually only lend you money for the purchase, but not for the renovation work. We will make sure you have the money for both, so you can bring the project in on time and score your profit. Don’t wait any longer, it is time to get started!