Top 5 Tips For Flipping Homes
/1. Understand What You Can & Can’t Do
a. Understanding what your individual abilities really are vs are what you need to hire out will help you understand and formulate what the true expenses and timeframe will be. Not everyone is a painter, some people should avoid electrical, yet others should never lay flooring. What you can get away within a rental is now what you will get away with on a flip. Quality materials and quality craftsmanship is noticeable immediately, especially by real estate professionals. Find out what you can do and hire great professionals to do the rest.
2. Don’t Over Improve
a. Going over the top like HGTV or putting in basic materials will just be like shooting yourself in the foot. Plan your updates and styles to be just a step or two nicer than the standard styles of your active and sold comparable properties. This will make the property stand out, but not be so over the top it turns way buyer or worse yet, kills your profit margins!
3. Three Bedroom Two Bath
a. In most instances, at least for single-family homes, it’s much easier to sell a three-bedroom home over a two-bedroom. Going from three to four or more does not have quite the same impact but selling a one or two-bedroom single-family property is tough in many market conditions. Having these two key rooms will help broaden the buyer pool and shorten time on the market, equally more potential revenue in your pocket.
4. Find The Right Lender
a. No matter how you pay for it, you have to find the right go-to a lender. Find someone who is responsive, understands vast and creative finance models, and ultimately understands your business needs and model. Getting the right person involved will ease transactions and create more flexibility moving forward into other investments. Small banks or commercial lenders may be a great option to increase options and flexibility.
5. Know Your Numbers
a. This seems simple but know all your numbers and track them carefully. You should know not only what your purchase costs and monthly payment costs are but you should also know your holding costs per month like utilities, taxes, etc. On top of that, you must know what your future real estate sales transaction costs will be as well as the material and labor costs to get the property flipped. Flipping homes is all about return on investment or ROI. These numbers should be trackable, easy to understand, and reviewed regularly to avoid a potential loss.
