Real Estate: What it Takes to Earn Money Fixing and Flipping Homes

With the economy currently a seller’s market, people with an interest in flipping properties are considering it as a new venture. Listed below are a few tips to achieve success fixing and flipping homes.

Earnings Potential

As housing prices continue to rise, the market for fixing and flipping homes grows. To make more off each property, ultimately you want to purchase affordable homes in desirable locations. You also need to have a crew to contact; one that’s readily available so that when you acquire a property you can start on it immediately. The faster the process is from start to finish, the higher your yearly earning potential.

Buy in Low

To ensure a larger profit, something that affords more workers and a decent profit for yourself, buying a home under the market value is beneficial. Buying a property currently in foreclosure, one with major repairs, or one in serious need of updating, are a few examples of properties worth the investment.

Secure Financing

When it comes to fixing and flipping properties, having access to capital sooner versus later is essential. When a home comes on the market at a fraction of its real estate value, companies jump to secure financing and make the deal. Unless you’re on a speed dial with a bank, securing funds through a traditional lender may take too long and cause you to miss an opportunity. A hard money rehab loan is another option that will allow for quick access to money with fewer stringent requirements for approval.

Repairs That Pay Dividends

When it comes to investing in a property to turn a profit, it’s all about the repairs. The kitchen is, by far, the room where you need to invest money in a complete redo. You’ll be updating major appliances, replacing cabinets, plumbing, lighting, and flooring. The bathroom is the second room of interest. Even a small space can appear much larger and functional with closets and the right fixtures. Don’t overspend on paint and flooring, and stick to a neutral color palette. It’s also important to invest in the exterior and landscaping. Often first impressions can make or break a sale.

Factoring in Costs

Unless you are a contractor or you have one in the family, figuring out the cost of labor and supplies on a property revamp is something that gets better over time. The first one is the experiment, a learning curve. As you do more properties, you have systems in place that you can rely on, both in terms of the time frame and the costs involved. Make sure to factor in all costs ahead of the purchase to ensure it’s worth your time and investment. Appraisals, inspections, and title searches are just a few of the hidden costs. You’ll also have a broker’s fee, utility hookups, property taxes, and staging, to name a few.

Time Is of the Essence

With regard to fixing and flipping homes, time is always of the essence. The quicker you completely overhaul a property, the faster you can list it, sell it, and repay the loan. This is why you should have your contractors view the property in advance to assess and then offer a feasible time frame for completion.

Reliable Source

Finding qualified professionals such as a plumber, an electrician, and a general contractor is critical to your success. Otherwise, you’ll end up with a house that can’t pass inspection or property that takes two to three times longer to finish. Either scenario will chip away at your profits.

The process of fixing and flipping homes and making large profits takes time to master. However, once you get past the initial trial, you’ll be better able to figure out whether a property is worth the time and monetary investment.

 

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