Practical Ways to Turn Your House Flipping Project into a Success
House flipping gained so much attention because of reality TV shows. A few minutes on screen made this real estate investment strategy seem easy enough. The investor buys a somehow dilapidated house and makes some renovations. Then, they sell it to gain a profit. This exposure made some people try it and fail.
In reality, the fix-and-flip strategy is not as easy as flipping a coin. If you want to get serious with this investment, you have to remember some essential things. Also, there are things that you should avoid if you want to get a profit out of the sale. Contrary to what TV shows tell you, there may be instances that a flipped house would sell at a loss or a break-even mark. Here are some reminders to gain higher chances of success in house flipping.
Find an Excellent Source of Funds
When you buy a house to live in it or rent it out, you can look at banks for a loan. House flipping involves a quicker pace than a normal acquisition of houses. The end goal is to renovate and sell it after, which averages around 180 days. You may not have time to go through the many requirements needed for banks to release a loan.
An excellent alternative is to look for hard money lenders that know the needs of house flipping. They can lend you money not only for the purchase of the property. These private lenders can also extend the funding for the renovation process.
A private lending company does not focus so much on your credit history and score. They look at the potential of the property you wish to buy and your ability to add value to it. They can also be steady partners if you wish to make house flipping projects in the future.
Look for Some Elements When You Buy Properties
You do not grab any rundown property that you see on sale. Flipping houses does not work that way. The real deal about flip-and-fix is on the buying, not on the selling. You must look for a house that only needs cosmetic renovations. Examples of these upgrades are paint, refinishing floors, or adding some carpets. You must also make sure that the property has a good foundation.
One mistake of first-time house flippers is when they buy a house with many technical issues. Examples of these problems are in plumbing and electricity. Also, you should not buy a house that needs major repair such as one with a dilapidated roof. All these big fixes will drive you to a break-even mark, or even a negative profit. Then, the time you spent renovating is also considered a waste.
Seek a Reliable Team
This aspect is where reality TV shows fail. They show house flipping in a way that many people think they could have a major DIY project and earn quick money. But, if you are a serious real estate investor, you would seek quality. You understand that what you do can make or break your reputation in the industry. Also, you would care for the welfare of the people who would live in the flipped property.
You must find professional inspectors and contractors to help you do the job. Aside from having a sturdier refurbished property, these people could help you save. Trying to DIY house flipping could lead you to higher costs of supplies, if not a repetition of some tasks. Professional contractors can also make the job quicker, thanks to their expertise.
Getting a real estate agent can also help you in seeking the right property to buy. They can also help you price the refurbished house appropriately. They can find potential buyers for you. Thus, in essence, house flipping is never a one-man project if you want it to be successful.
Search for a Good Neighborhood
A strategy that could help you sell your flipped property fast is a good neighborhood. When you first buy a house for flipping, assess the community where it belongs. Potential buyers do not only look at the house itself. They also consider many factors such as the safety of the place and its accessibility to key areas.
Find a neighborhood that shows a low crime rate, has good schools, and excellent amenities. Then, look for a house for sale that needs some minor renovations. When you find it, you have the potentials for a successful house flipping project.
House flipping does not translate to instant cash. You have to play the right strategies and put in hard work in refurbishing the property. But, when you do things right, it could be a lucrative venture that you can do over and over.
Meta title: Doing the House Flipping Project the Right Way
Meta desc: The success of a house flipping project depends on many factors. It is not a magical thing that would give you instant money. Here are strategies that could help you ensure success with this investment.