Intro to house flipping
What is house flipping
Imagine taking a tired, outdated property and breathing new life into it, all while turning a solid return on your investment. House flipping is a great venture in the world of real estate, making potential into reality and profit.
Before you can start your journey, you need to find a property with enough equity to flip. So, how do you find the right properties to flip? Let’s take a look into some strategies that will help you take the steps in the right direction.
Finding Properties
Start by checking out local markets to find areas where homes are undervalued or have potential for growth. Websites like Zillow, Realtor and MLS are great for browsing what's available. You can also talk to realtors and wholesalers who might know of off-market properties that aren't listed yet.
Evaluating Properties
When you are looking for a property to flip, it’s important to carefully evaluate its potential. Start by estimating how much repairs will cost such as roofing, plumbing and electrical expenses, they are usually the priciest. We need to calculate the After-Repair Value (ARV) of the property, which is what the house will be worth after being fixed up. To do so you can look for prices of similar properties in the area, make sure to consider the neighborhood as location can make a difference in the price. All these evaluations will let you know if the property is worth investing in. While we are still looking for properties, getting a real estate agent could help you with market search and help with these next steps.
Fixing the property
Now for the real magic of your work to begin, always plan what needs to be fixed up and budget your expenses to see fit, stick to your budget and leave some room for unexpected costs. You want to focus on areas that will catch buyers attention. Decide if you’ll do the work yourself (DIY) or hire contractors. If you hire contractors, make sure to find reliable ones who won’t overcharge or cut corners. Pay attention to your project closely to keep things on track and keep organized to be able to get your flip to pay off. Especially if it's your first project, squeeze out as much information you can get from experienced flippers by asking the right questions, and always ask for referrals. If you don't have the time to manage the project, find a reputable general contractor that can help you with the project. Here are some of the responsibilties of a general contractor: sourcing and shopping for materials, get bids from multiple different contractors, managing sub contractors and setting expectations, plan and execute under budget and on time.
Selling The Property
Once the property is fixed up and ready to go, it’s time to sell. First things first, you need to set a good price. Take a look at recent sales of similar homes in the area so you do not overprice and scare away buyers or underprice and miss out on profit (comps). Staging your property for listing can be key, make it look clean and liveable so it is alluring to potential buyers. Hire a professional photographer. You've spent all that time, money and risk. Don't sell yourself short and take terrible photos from your phone. Now we need to list your property on previously visited websites like Zillow, MLS and social media to spread the word out. If you have done research you should keep your price firm if you get negotiations and when you finally get an offer that meets all your criteria and work with your agent to finalize everything.
Conclusion
Flipping houses might sound complicated, but it can be super rewarding if you know the basics. By finding the right property, knowing how much to spend on repairs, and making smart choices when selling, you can turn a fixer-upper into cash. It’s not a get-rich-quick thing, but with the right planning and a little hard work, house flipping can be a great way to make money. So, take what you’ve learned and start your journey, you might just find your next great flip!
