How to Successfully Flip Properties
House flipping has increased in popularity in recent years. More people are taking the time to transform rundown properties into beautiful homes to generate a superb return on their investment.
If you’re eager to enjoy success in the real estate market, you must do your homework when choosing a property, seeking funding, and hiring contractors. Simplify the process by reading the following advice on how to successfully flip properties.
Make Smart Financing Decisions
Your financial circumstances will likely determine your financing decisions. If you have a significant sum in the bank, you likely won’t think twice about investing some or all your savings into a house flip.
However, if you don’t have a nest egg to rely on, other options are available to fund a property purchase. For example, you could apply for a bank loan, but you’ll need to make a downpayment, which is traditionally 20% of the property’s total price.
Many new and experienced house flippers often use hard money loans to buy properties quickly and easily. What is a hard money loan? It’s a short-term loan provided by investing groups, financing companies, or solo investors, and secured against a hard asset, such as real estate. It’s a superb way to raise money at a fast rate, as a property is used as collateral.
Boost Your Real Estate Knowledge
Before making an offer on a property, you must spend some time familiarising yourself with the ins and outs of real estate. You must learn how to pick the perfect property to flip, which must be in an up-and-coming or popular location. Research a location to boost confidence in the investment. For instance, if houses typically sell for $100,000 in a specific neighborhood, you might struggle to sell a home for $200,000+.
Also, identify the renovations to skip or invest in to generate a bigger return. Don’t forget to learn about any applicable zoning or tax laws to protect your finances.
Choose an Easy First Project
If you have never flipped a house, select a property that’s easy to flip. Your goal should be to make quick, hassle-free improvements to boost the property’s overall value, providing you with a great return on investment.
For instance, you could add value by:
- Repainting the walls in white
- Fixing issues
- Installing new flooring
- Deep cleaning
- Improving the exterior
- Replacing outlet and switch covers
- Changing fixtures, such as replacing the faucet
A few cosmetic updates could transform the look and feel of the property, which may increase its value.
Hire Trustworthy Tradespeople
Every house flipper must research trustworthy tradespeople near them, as they will make or break a house flipping project’s success. Set time aside to meet with skilled contractors near you to discuss the project and confirm they can adhere to your timeline. Also, compare quotes and ensure the one you pick complements your budget.
Perform in-depth research on each potential contractor to make an informed decision. Remember, you’ll get what you pay for when it comes to property renovations, which is why you shouldn’t automatically accept the cheapest quote.
