House flipping is all about buying real estate and selling for profit after renovation. Today, many people are into flipping houses, perhaps you’re thinking of getting into the business. If that is the case then this article is for you. To guide you through the steps for flipping a property.
Find the right market:
There are various real estate markets available, and the value of each differs. You need to do find a market that works with your budget and, at the same time, is profitable enough to buy and sell. Real estate investors usually classify these markets by Class A to D, with A being the most valuable and expensive and D being the cheapest. Depending on your budget, you can start with Class D, but these markets come with higher risks. The important thing is, don’t go for the outrageously expensive or ridiculously cheap.
Draw up a business plan and set your budget:
As an investor, you need a business plan that outlines how you intend to turn the property into profit and a budget that explicitly explains all the financial obligations you will take in the business. Your business plan should include the timeline for the project, so you’ll know how fast you’re moving.
The worst thing that can happen is to find the house of your choice but not have the financing to buy immediately. This is why you should start working on the funding long before you find the home. Your business plan and budget have already given you the idea of how much financing you need, so look for the best financing on time. Focus more on the fees rather than interests.
Find the right contractor:
Unless you’re a builder, you won’t be handling the renovation yourself. So it is essential you find the best renovation contractor, and on time too. Build a network of contractors for different repair aspects, from general to electrical contractors, to plumbers and handymen. You should have as many of these people as you can.
Find the right house:
Now that you have a network of contractors and financing at your disposal, it is time to find the house you’ll buy. To make a profit, you have to buy a house at a price that allows you to renovate it, pay off certain fees, and still profit from the sale. So you have to be thorough in your search. It helps if you work with a Realtor. And don’t rush into a deal.
Buy and renovate:
So you’ve found the house, buying it is a long process in itself. You have to ensure the house is worth the value, and won’t guzzle all your money in renovations. This means proper inspection; you can hire a home inspector for this. Let contractors check out the house and identify details that you may not be able to see. As a beginner, it’s advisable to buy only houses with minor renovations, the more experienced you become, the bigger you can go. Once the contract of sale is signed, get to renovating. The faster you renovate, the quicker you can sell, and the more money you’ll save on additional expenses that comes with owning the home such as taxes, insurance, interests, etc.
You should let a very experienced realtor handle this. Fix the price based on expert opinions and your profit projections. Be familiar with real estate pricing and work with a local realtor until you’re thoroughly experienced.