Things That Make All the Difference in House Flipping
While there are endless ways to invest your money, real estate investing is a lucrative option that people across the globe are taking advantage of. Flipping houses is the most popular form of real estate investing. It involves purchasing a property, renovating it, and then selling at a higher price to make a profit. You might even consider flipping the house you live in right now.
While you won't get rich with your first or second house flip, when done right, house flipping can bring in some serious cash. In fact, in the first quarter of 2020, the average investor was making around $62,300 gross profit from a flip.
But being successful in the house flipping industry isn’t as simple as it may seem. There’s a lot of research and intricacies that must be considered to maintain a steady profit margin.
Buying the right property from the get-go is key in being successful. Success also comes from having the right team of people to help you along the way. Growing a house flipping network is key.
Buy the right property at the right price
Getting the biggest return on your investment starts with buying the right property at the right price. While a home may have tons of potential, you must look at the details to ensure that you’re making a sound purchase.
There are many factors to consider before buying an investment property. Start with location. Make sure the home you’re buying is in an area that appeals to potential buyers. Consider the school zone and surrounding neighborhoods.
Other factors to think about before buying a property include:
Condition/age of the home
Square footage
Extent of needed repairs/renovations
Look for a property that has a good location, is available at a good cost per square footage, and isn’t in need of serious repair. You’ll likely want to stay away from a property that has structural damage, foundation issues, or other costly fixes.
Consider buying from an investment property wholesaler
If you want to get the most bang for your buck when buying an investment property, consider buying from an investment property wholesaler. These companies are run by full-time property investors that can find hidden property deals.
When working with one of these companies, you can save up to 50% off the value of the home. Investment property wholesalers know the ins and outs of finding foreclosures, fixer uppers, and properties in distress.
Buying a house well below its market value is a huge win for your wallet and your bottom line.
Hire a solid contractor
After buying an investment property, now it’s time to get down to work. While there may be some projects that you can tackle yourself, chances are that you’ll want experienced hands along the way. To make the flipping process a breeze, hire a contractor that knows the ins and outs of real estate investing and house flips.
As a real estate investor, it’s crucial to find a contractor that has an investor mindset. Find a company that has experience in property flipping. The right contractor knows how to get quality materials at the right price. They can also offer advice in deciding which projects will provide the highest return on investment.
Hiring the right contractor keeps your flips on time and on budget. You don’t want to work with a company that cuts corners or one that wants to update every corner of the property.
Just as you research a property before buying it, you’ll want to thoroughly research a property flipping contractor. Before choosing a contractor, there are some questions you’ll want to ask, including:
How many house flip projects have you done?
How long have you been flipping homes?
Do you currently work for a real estate investor?
How large is your crew?
Do you use subcontractors?
Is your company insured?
Getting answers to these questions makes it much easier to find a contractor that meets your needs.
Find a local listing agent
Once the property has been renovated and is ready for its new owners, the next step is to get the house listed. Ideally, you’ll want to find a listing agent that has experience working with real estate investors.
Find an agent that not only knows the area but has a history of working with rehabbed properties. There’s a special kind of finesse that goes into listing and showing a home that has been recently renovated.
Tips for successful house flipping
Over the years, there are several things I have learned about real estate investing and house flipping. Here are some of the top tips I offer to people who are new to the world of flipping.
Be patient and don't skimp on research. The perfect property won’t magically fall into your lap.
Be particular when buying a property. Consider the location, the home’s appearance, and the amount of work needed to make it appealing and livable.
Align yourself with the right network of people. The more people in your circle, the better.
Set a budget and add a buffer. Chances are you’ll run into unexpected projects, so always have money set aside to account for these scenarios.
Always have a backup plan because things will and do go wrong.
Keep learning and keep at it. House flipping is a learning experience and it only gets better as you get more experience under your belt.
Are you ready to take a shot at flipping your house? Need a contractor you can trust? Look no further than Home Rx Chattanooga. We have more than 13 years of experience in providing high quality flips for home owners throughout Chattanooga and beyond.
Contact us at (423) 805-6137 to discuss your property.