You watch all the reality TV shows showing people flipping houses.
You see the horrors & drama that can occur while you are buying, fixing or trying to sell your investment property.
Even the media makes out house flippers as some sort of “old boys club” that are cut throat and rely on secret tactics that the general public should never know.
In reality, the drama on house flipping shows is “simulated and intensified” and the good old boys club is a myth.
Think about it, if the people in the house flipping reality TV shows never had problems, no screaming, yelling and freaking out, no over drawn bank accounts, no “last minute down to the wire we must get this on the market” events, then the shows would get boring quickly and you would stop watching them and get out there and flip some homes yourself.
Aha caught you!
Time to get off the couch get out there and start flipping some homes yourself and here are some tips to get you going in the right direction!
#1. Build a team.
Line up some contractors, a real estate agent, a hard money lender, even a title company.
Many will give you a discounted rate because you are a real estate investor!
Having people around you who will “watch your back” is invaluable.
#2. Do your own research.
When you are looking for a property, check the recent sold and actively listed comparables.
If you are looking in an older neighborhood, are the other homes upgraded with the larger tile, newer cabinets and sink fixtures, etc.?
And if so, how much higher are these upgraded homes selling for then say the nice ones who have not been upgraded.
Also time on market is a key indicator to show if doing the upgrades is really worth it.
If the super upgraded homes are taking 4 to 6 months to sell, that shows you people buying in the area aren’t really willing to pay the extra for modern upgrades. It happens sometimes in certain places.
#3. Know when the repairs are minor or a major remodel is needed
We have seen some investors get a great deal on a home, only to find out that the repairs needed are going to wipe out most or all of anticipated profits.
Get a home inspection done by a professional. (They should be part of your team!)
Yes, we know it costs a few hundred dollars now, but even if you have to get 3 homes inspected before you actually buy one, that $1000 you spent might have saved your many more $1000’s!
#4. Make sure you have a good cushion of cash, just in case…
Just like they show on the reality TV shows, unexpected things can occur at any time during the remodeling process.
Expect the unexpected!
Make sure you have a cushion just in case.
#5. Don’t panic if you go over budget! Plan for it!
Once in a while you will go over your budget.
You should always have a contingency plan in place when you flip houses.
You might even get stuck with a lemon that causes your total investment of purchase and repairs costs to equal the current sales price!
If you are looking at making say $25,000 after rehab and selling costs, but some termite and framing damage eats up another $20,000, have a plan in place to get the home refinanced at a low rate and rent it out for a while.
If you have to rent the home out for a few years, at least you are building equity on the back end and adding to your retirement package!
Check out what other investors say about us on Google.
You will find out, we will always have your back!
Now go out there and flip houses!
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