The simplified definition of flipping a home is buying a property with the intention of improving it and quickly reselling it for a profit, doing the same has become quite popular in recent years. The properties involved with these changes can be divided into two groups for the most part. The first group are the houses that mainly require cosmetic improvements and updates such as cleaning, painting, new carpeting, appliance and fixture upgrades, etc.

The second group of houses are those that need a major reform; This group may include such things as moving walls, new drywall, windows, doors, kitchen cabinets, new roof, landscaping improvements, etc. This type of project should not be attempted as a first attempt without a good working knowledge of what is involved. The desired end result with either pool should be a job well done at a profit, when done correctly and with the right options the profits can be very good.

Flipping Guidelines

1. Financing

You should know ahead of time where you plan to get funding so you can move quickly when you find the right property. Your credit is an important factor here in helping you get the best loans and rates, but it’s not the only factor, so don’t let it hold you back, just work to improve it. There are many financing possibilities, so explore your options, search for potential lenders, and get prequalified by up to three lenders. Another option to consider is to start with the house you currently have as your first investment.

2. Know your market

Familiarize yourself with the local real estate market, what people look for in a house, what type of features, what size, how many bedrooms and bathrooms, is there a shortage of this type of house, what price do houses like this sell for, these houses sell fast ? It is essential to know and understand the answers to these questions.

3. Selection of house

Knowing and understanding your local market makes home selection much easier because you know what to look for and can recognize deals when you see them. If the house is in the right area, making a selection basically boils down to four questions; What can you buy the house for? What are your estimates for repairs? What can you sell the house for when it’s finished? Does this leave a profit?

4. Rental

People are looking for nice houses in good and safe neighborhoods, when looking for houses you should look for the reasons why people would be attracted to the neighborhood. The house must be located in an area that has been and will continue to be valued. If this is a home you envision for a young family, where are the schools located? Will your completed project improve the value of the neighborhoods?

5. Inspection

After finding what appears to be a promising change, a thorough home inspection should be done, depending on your experience and comfort level doing this type of thing, it may be a good idea to have a home inspection done by a professional. . Hiring an inspector will cost a few hundred dollars, but it can save you a lot of money by avoiding costly unexpected repairs like a bad roof, structural issues, and termite damage.

6. Costs of materials and ideas

It is important to know and understand what improvement costs may be incurred when searching for properties so that you can make quick and fairly accurate estimates. To help you with this, I would recommend walking around home improvement stores often and looking at everything from building materials to paint, fixtures, appliances, tile, carpet, lighting, etc. These tutorials can also help you fill your head with ideas.

7. Choose the upgrades

Getting the most out of your investment is important for you to achieve the best return, one thing that can help you with this is looking at homes that are selling fast and looking at what it was about these homes that made them attractive to drive a quick sale. What kinds of features did these homes have, such as flooring, paint colors, appliances, lighting, fixtures, and curb appeal? What was the sale price relative to similar homes recently sold in the same area? Observing these points will help you recognize the values ​​of various characteristics that attract people and help you make wise decisions.

8. Schedule/budget

It is very important to develop a comprehensive plan with each release, the initial one starts with ballpark numbers including purchase costs and fees, an estimate of improvement costs, and a projected cost of sale. The actual work plan then takes into account a detailed list of what you plan to do and cost figures for each of the items, the plan should also include a timeline from start to finish, be sure to include some time and money extra. for the unexpected, time is money! Finally, the plan must have a projected sale price.

9. Labor/labor costs

It is best to know how to do most of your planned work or at least a good part of it to start with and then build your skills from there. If you cannot perform part of the required work, you will have to seek competent and reliable help with this. I advise you here to be very careful in your choices, make sure you know the person you select well, or else check references carefully. You don’t want a person who starts the job and then disappears for a week or more.

10. The sale

From day one of your flip, you should consider your flip for sale because an interested person may walk in, so you should have a good idea of ​​your expected sale price. Within a couple of weeks of the completion of your project you should be thinking about selling, there are several options at this stage to consider, but keep in mind that a typical estate agent will charge 6 percent of the sales price. To save a ton of money I would recommend looking into a flat fee real estate agent, this will give you the benefits of having a real estate agent and get your house listed on your local MLS “multiple listing service”.

Tearing down and fixing houses can be a lot of fun, exciting, and very profitable for those who enjoy this type of work and the challenge it offers. The above guidelines are meant to be of help, keep in mind that they are highlights and are far from inclusive of everything involved.

I would also like to comment that the real estate market, like everything else, goes up and down. Currently the real estate market when looking at a national level has been in a slowdown, “an overabundance of new homes in certain areas” this scares some people but it doesn’t mean you can’t make money from investing, opportunities still abound and always will. A slower market just requires more caution, good research, careful planning, and go for it! The real estate market in many parts of the country is still very active and growing at a good pace, keep in mind that it is all about supply and demand, guideline number two.