 House flipping is a growing field--there are even television shows dedicated to it. House flipping is where real estate investors buy homes and then resell them at a profit after you fix them up a bit. You can make a lot of money, but you can also lose a lot if you are not careful. Before you decide to flip a house, here are some tips to follow to make sure you get money back. Before flipping a house
Before you even decide to flip a house, there are some requirements you’ll need beforehand. You don’t want to spend your money on a house trying to flip it, only have no one buy it. Meeting these requirements will help you go in the right direction when you flip a house.
- Credit score. A good credit score will help you get a loan.
- Cash. Using cash for the down payment gets rid of the need for a private mortgage insurance.
- Knowledge of real estate. You should know the real estate market inside and out. You should know what sells a house and what adds value to the home.
Location, location, location
That phrase is connected to real estate and it connects to flipping a house. You should be looking for homes in an area where people want to live. You wouldn’t want to try and flip a home in an undesirable location; no one will buy it for the price you're asking. When trying to find a home to flip, try and findone that fits these categories.
- Good building blocks. It’s going to cost a lot of money if you have to tear down a house completely and rebuild. Try and find a house that is structurally sound. This will save you a lot of time and money.
- Schools. It’s known in the real estate market that houses with a good school district tend to sell more quickly.
- Local. It’s a good idea to find a house to flip that is near your own home. You’ll be there often sprucing it up, so it’ll be easier if it’s closer to you.
- Kitchen. The kitchen is a big selling point. When finding a home to flip, check out the kitchen and see how much work it will need.
- Value. The house you choose should be below its value in the local market or you won’t make money off of it. Also, make sure to check out the house in person first, don’t trust pictures online.
Educate yourself
As mentioned before, you should know everything about the real estate market. You should know about the variety of financial options. You should research how much repairs tend to cost to make sure you’re getting a deal. Another good idea is to start building relationships with contractors and plumbers. If you decided to flip houses more often, hiring companies that you trust will make sure you are getting a good value. Knowing what home improvements will increase the value of your home will help you sell the home quickly. It’s a good idea to find someone who has flipped houses in the past and seek their guidance. Research
You can find foreclosed houses on a variety of websites. Some websites include:
Once you find a home you like, you should check out the house on BuildFax. BuildFax provides a background check on the home. It tells you the history of the home which includes repairs, remodeling, and additions. This will help you save money. If something was replaced recently, then you know not to replace it again. Additionally, a homeowner says something was replaced sooner but BuildFax claims it wasn’t, you can save money by asking to pay a cheaper price. Start working
Now that you’ve finally found a perfect house to flip, the first step is to make sure you have all the correct permits. It’s a good idea to also create a budget and deadlines so your project will get done in a timely fashion. Then you’ll need to hire contractors for the repairs.
Relist and sell
All the repairs are done and the house is beautiful. It’s now time to sell. You can either list the house yourself or with a realtor. Realtors know how to access buyers and list your house for you. They also know the market extremely well and could hopefully help you sell your house quickly. If you decide to list the house yourself, you will save money in realtor fees. If it’s your first time flipping a house, a realtor may be a better choice until you get used to the process.
House flipping can be beneficial, but it’s a tough career. You may have to take an offer that’s lower than you wanted if you don't want to continue paying for the home. It can be difficult, but when you finally start selling more homes, it’s extremely rewarding.
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