Flip Homes for PROFIT
"Flipping" in real estate means to buy a property -- preferably as cheaply as possible -- fixing it up, and then re-selling it at a profit.
Do know your market.
Real estate can be affected by factors of the economy, interest rates, even the time of year. Explore all search possibilities such as Realtor services, classified ads, websites, auctions, and bank foreclosures.
Do look for cosmetic-only repairs.
Look for a "bad" house in a good neighborhood. A quality built home in a good area in need of TLC is an excellent consideration. Choose one that needs reasonable updates and obvious cosmetic repairs. Avoid homes requiring costly structural repairs.
Do be prepared to do the work yourself.
Plan to devote your time and resources for quick results. If you have to secure contractor services, be sure to get the costs and conditions up front and in writing. Monitor and supervise the work and document your project with pictures and organized records of repairs, contracts, building permits, vendors, specifications and paint colors.
Do know the features that will sell a home quickly.
Is the home conveniently located near schools, districts, work districts and other cultural or lifestyle conveniences?
Don't ignore curb appeal.
To catch buyers' attention, make sure the exterior is clean and in good shape. Landscaping and lawn care go a long way in home presentation — as can most exterior repairs and upgrades (new paint, siding, fencing or lighting).
Don't procrastinate - if quick revenue is your real aim.
Time is money! The sooner you start renovations, the quicker you can put your home on the market. Have your materials and tools ready — or have contractors scheduled to go to work.
Do have your budget, timeline and strategy in place before making the purchase.
Determine your selling price ahead of time so there are no surprises. Some factors that can cut into profits are:
- Purchase price and repair costs
- Realtor commissions or advertising
- Taxes, homeowners' fees, insurance and utilities
To help minimize some of these costs, stay organized, plan well and stay on-schedule.
Do get a professional home inspection.
Get an opinion from a professional/certified home inspector before purchasing the home. Inspectors will provide an unbiased report on the overall structure of the home and will evaluate any potential risks or hazards.
Do know your financing options.
Unless you plan to pay cash, get pre-qualified and have financing in place before you search. Know your financial limitations as well as your options.There are a variety of loans available, depending on your credit and financial situation. Make sure to find out how your taxes will be affected as well.
Don't start with a high-risk property.
Take baby steps and learn how to spot a bargain with profit-potential. (A 10-15% profit margin may seem modest, but is considered a great success.)
Always use the services of a Realtor.
A good Realtor can advise you on current market trends and hot areas. His or her negotiating, marketing and networking skills can go a long way toward increasing your bottom line.
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