How to Flip a House - The Art of the House Flip
You can make a lot of money by flipping houses if you do it correctly. The first thing you should consider is how much profit potential there is in the particular property you want to try and flip. If your profit margin is too low you may be taking a risk by buying a house even if you get a really good deal on it. You must educate yourself first about all the costs involved in flipping a house, this will help you avoid purchasing a money pit that could end up costing your profits in the end. There are many factors to consider when flipping houses, if you are considering purchasing a property with the intention of flipping it for a profit you should first educate yourself first.
In other words, save yourself a lot of time, trouble and most importantly, money, by learning how to flip a house the right way.
Finding A House To Flip
When searching for properties to flip you should use every available resource. You never know where you might find that next gem of a house that is a prime candidate for flipping. Of course you should look in the obvious places such as the local classifieds for the area in which you plan to make your purchase. You want to be sure to talk to real estate agents in the area too, be sure you explain to them exactly what you plan to do with the house. A good real estate agent can become very valuable to you because they can potentially supply you with many homes that fit your criteria for flipping a house. One place to look that is not so obvious is your own bank. If you are a good customer of theirs and you have accounts in good standing, it is often possible to purchase repos directly from them. When doing this it is sometimes easier if you have enough cash in your account to cover the cost of the property even if you finance it. Some banks will let you secure a loan based on the amount you have in a savings account at their bank.
What To Look For In A House
You want to find a house that is in need of repair or cleaning while avoiding extreme makeovers. You should always avoid buying a house that is in need of major repairs for two reasons. The first reason is because there is the possibility that the cost of repairs will exceed any profit you can make on the property. The second reason is that if the repairs take a good amount of time to complete, this can add up to a lot of money spent on mortgage payments with nothing to show for it. What you are looking for is a house that is structurally sound but may be very ugly and in need of basic repairs such as carpet or new hardware and paint. The houses to avoid would be those that need things like foundation repair, severe water or fire damage, new roofs, and homes that pose a significant health risk such as major mold infestations. These are things that can take a lot of time to repair and the cost is simply too much to bear for a property you are planning to flip.
How To Be Sure You Are getting A Good Deal
If you are new to flipping houses, you may not be aware of some of the costly damage that can be hiding in these discount properties. You should always get a home inspector to give you a detailed assessment of the property. An inspector who does their job well will find everything that needs to be repaired now as well as in the near future. Knowing what you need to do to the house is your first step in calculating the cost for repairs. Next do some investigating in the neighborhood to see what comparable homes in good condition are going for. This will give you a good idea of what the home will sell for after it is completed. Once you have a good estimate of the cost and time of repairs, you can put the numbers to paper and determine if the property is going to make you a profit.
Getting The House Ready To Sell
This is often the easiest part of flipping a house because most of the work is done by contractors. However, hiring the right contractor is a key ingredient to making money when flipping a house. Before you hire a contractor, you should get some quotes from a few different ones. Find out what each contractor plans to do for that price and negotiate with them to try to get the necessary repairs done while keeping within your budget. Don't allow a contractor to charge you for extra work that was not in the agreement. Be sure that you have an agreed in writing for the work to be done and the total cost of that work before you ever let them begin to do the job. Never let a contractor begin work based on an estimate because estimates can be wrong and often you will be charged more upon completion of the repairs.
Flipping The House
If you have done all your homework and purchased the home and completed the repairs under budget then chances are you will make a tidy profit on it. Every time you flip a house you learn new ways to save money and improve your income potential. If you keep notes on what works best and tricks you have learned as you go, you can be flipping houses like a pro and making huge profits every time.
About the Author:
Russ Hancock writes articles on real estate and is the owner of the Flip That House Real Estate Blog.
