Nothing is ever as easy as it looks on television shows but you can make some money when you flip a house. From finding the right real estate secured lending options to deciding if you should opt for hard money loans for real estate investors, there are things you can do to get the most out of the experience of flipping a house.
- Look at your finances. When you want to buy a house to renovate and sale, your first task is to take a hard look at your own financial situation. You need to know what your budget will be and what kinds of access you will have to funding and how you will be viewed by real estate secured lending institutions. Look at how much it will cost you to take out a short term loan. Remember, if you need to take out a short term loan for your investment, you need to factor in all of the costs that come along with the loan. In addition to the loan costs, you need to pay taxes on the property and maintenance costs for the property for at least a year.
- Research home renovations specialists. The amount of money you are going to have to spend renovating the home you want to flip will depend on the condition of the house and what you plan to do with it. A home that is super cheap may take a lot more than you can spend to turn it into a really great investment. Before you start to look at properties, you should look into what local renovation experts charge and what different projects will cost. These costs will have to be factored in when you are deciding how much money you will need from real estate secured lending institutions or financial institutions who are open to providing secured short term loans. Most real estate investment lenders look more favorably upon people who have done their research.
- Get to know the region’s real estate market. Are you looking at properties in an area that is in the middle of a period of improvement? What is the potential for the area? Sometimes you can find great properties in neighborhoods that have not quite come into their own. Washington, DC is a great example of a city that has changed over the last few decades. There are areas where the local taxis would not travel that are now some of the hottest parts of town. Knowing the area and the trends can help you pick the right properties to flip. Look into the market and see what properties are selling for. You need to identify trends in the real estate sales.
- Keep the homebuyer in mind when you are planning your renovations. What kind of person are you going to market your properties to? If the area is know for having a great school district and maybe parks and other family friendly areas, your buyer may be a young family. You will want to make your properties as family friendly as possible to attract people with young children. If there is a basement, these can be renovated to create a family room or extra bedroom.
- Put all the work you did into your marketing documents. You need to make a list of all of the work you did on the property. If you replaced the HVAC and electrical systems, potential buyers need to be made aware of those things. Whatever upgrades you made to the property need to be clearly laid out. Some of your renovations may be hard to miss but some can be. The people who tour your property may not realize the plumbing has been redone unless you tell them. You did all this work and took out renovation financing to cover it, you will recoup that money if you let people know how much went into the renovations of the property.
- Be careful with your pricing. You want to pay back the loan you received from the real estate secured lending company but that does not mean you should overprice your property.
You can make money by flipping a house in today’s market.