5 House Flipping Do's
While many people have very specific dreams of enjoying the generous
profits that can be made from flipping houses very few people put
too terribly much thought into the process or any formulas that
might be pertinent to success when it comes to flipping houses as a
real estate investment venture or for the sake of building a nice
comfortable lifestyle or retirement. You will hear a lot about the
things not to do when it comes to flipping houses but very few
people take the time to mention the things you absolutely must do in
order to successfully flip a house and thus begin your ride on the
road to real estate investment riches.
1) Do put everything to pen and paper and plan it out carefully
before you begin. If you are going to enter into this to make money
you need to treat it like a business. This means you need to have a
plan of action and make every effort to work towards carrying out
that plan.
2) Do determine a budget for the complete project. You need to have
a plan for how much money you are willing to invest in the property
itself, how much for renovations, and how much money you need to
make in order to be a worthy investment for your time and labor. A
house flip is a lot of work in order to pull it off successfully.
You want to have a good idea of how much homes in the neighborhood
are worth, the value of your property as is and the estimated value
of the property once improvements are made. In addition you should
also have a pretty firm grasp of the costs involved in making the
repairs in order to create a realistic budget for the entire
project.
3) Do have an inspection. This is distinctly the most important
detail that can save you a big amount of time, money, and heartache
when everything is said and done. Be prepared to walk away if the
inspection determines that there is more work needing to be done
than simple cosmetic repairs. You want to make changes that people
can see because those are generally the changes that drive up the
cost of the house. You want to avoid needing to make changes and
improvements that aren't visible but are very necessary. If you need
to invest a lot of money and labor into the house you need to
seriously consider the realistic profit potential the property
offers. If it isn't significant then you need to walk away before
the property becomes a real estate investment money pit.
4) Do become familiar with the neighborhood and plan your flip
according to the needs of the area instead of your personal tastes
and needs in a home. This is another thing that many first time
flippers forget. This is not a personal project it is a business
project and you need to treat it as such. Keep costs down and
feelings out.
5) Do remember that you are in the market to make money not waste
money when it comes to determining an asking price for the property.
You've poured blood, sweat, and probably more than a few tears into
your flip but you cannot set the value of the property by the effort
you've placed into it. Have realistic expectations of how much you
stand to earn from your efforts and how much you are willing to go
down on the price in order to walk away with some profit in your
pocket.
You should also take a moment to consider upon the fact that many
first time flippers actually lose money on their first flip. If you
turn a profit at all, even a small profit you have learned many
precious lessons that you can carry with you into future flips and
make more money. More importantly the lessons you learn from your
first flip are lessons that money really cannot buy so it is worth a
lower profit or even taking a slight hit if your experience makes
you even more money in the future as you continue along your real
estate investment path.
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