Flipping homes can be a profitable business if you are strategic and are familiar with the current real estate market in your area.
Whether you are new to house flipping or have flipped many homes up to this point, here are five things you need to know about the process.
1. Inspections are Crucial.
Before you buy a property, make sure you have a complete inspection done on it. Otherwise, you could end up with issues that eat into your profits after you start on the renovation.
2. Money Is Made at the Start.
Contrary to popular belief, money is made when you purchase the home, not when you sell it. Many times, people purchase a home expecting that their renovations will add significant value, but then they make a minimal profit. For a maximum return, purchase the property for the lowest price possible.
3. Hire a Contractor.
If you are moderately handy, you may be tempted to do the renovation work yourself. While this can save money, it can also eat up the majority of your time, which is why it is best to hire a general contractor and several subcontractors to manage the project.
4. Price the Property Low.
When you are done with the renovations and ready to put the property on the market, start by pricing it at least one to two percent below market value. This will spark interest in the home and encourage buyers to be competitive with their offers, which can help you make a larger profit on the project.
5. Secure Effective Funding.
Whether through estate loans or another form of funding, having access to reliable financing from the start of your project is essential to its success. To secure financing for an upcoming house flipping project, reach out to the top money lenders at North Coast Financial for guidance and assistance.