Honestly, the solution of fixing and flipping a house lies in finding an undervalued house and selling it to someone for a profit compared to commercial real estate investments. However, in my opinion, it sounds much easier than doing it. But, there’s no need to worry about it, though.
In this article, I’ll tell you about a few ideas that’ll put your plan of fixing and flipping your house on the move. So, read along with me till the end and let me know your thoughts.
Mastering The Fixing And Flipping Game
When it comes to working in the business, I always begin by researching a house and trying to determine its value. A free tool, named FlipScout, helps me quite a bit with it.
Here’s why I use it.
- It’s free-to-use.
- The tool can calculate the rehab expense automatically.
- You’ll get an alert whenever there’s a movement in the market.
- It can offer rental income and ROI almost instantly.
- You’ll be able to aggregate results from more than one source.
Once I’m done finding the best possible place, I usually follow the below-mentioned steps. It has worked out pretty well for me till now. Hopefully, you’ll get some help from it too.
Tip – 1: Check Where The Market Is Going
It may sound a little cliche at first, however following the market is always the right thing to do when flipping a house. After all, there’s no benefit in thinking about how it’s doing right now, as you’ll sell the property after three months or so. So, always look at the future with leading housing market indicators.
Tip – 2: Find The Best Possible Opportunity
As mentioned before, you should always look for an undervalued homestead while fixing and flipping. You can do so by using a tool or hire an agent or two and tell them to look for the same in a selected area. The former has been more efficient in my case though.
Tip – 3: Establish The Price Correctly
In simple words, the price you’re paying for the house will determine how much profit you’re going to make off of it. If you end up overpaying, the risk of not making any cash will grow massively. This is a pretty common error, so work on it as closely as possible.
Tip – 4: Learn To Negotiate
The seller of the house isn’t going to give up on the property for a cheaper price range. Thus, if you want to make the most out of the deal, you’ll need to ensure that you’re negotiating properly. Don’t forget to show where their home lacks to reduce their asking price even more.
Tip – 5: Go For The Correct Financing Choice
In fixing and flipping, you’ll need to acquire the money as quickly as possible. However, that won’t be possible in a conventional loan procedure, as it may take more than a week or so to complete it. You’d rather be fine with a hard money lender.
Tip – 6: Go For The Right Financing
When you’re dealing in this market, you’ll need to find a prominent source of finance from where you can get the money quickly. And, in this aspect, only a hard money lending option will be ideal for you. The paperwork won’t be an issue here as well.
Tip – 7: Create A Separate Renovation Budget
I know, it might sound a little counterintuitive to make a budget plan again right after you’ve bought the house. But, it’s important to plan about the amount you must make while selling the house. So, do it before buying the house if possible.
Tip – 8: Negotiate, Negotiate, And Negotiate.
No one’s going to sell their house at an affordable price. You’ll need to make them do it. And, for that, you have to inspect the property as closely as possible and find out the issues that’re available there. Now, show them all these while negotiating to bring down the price a little.
Tip – 9: Work On Marketing
While you can always try selling a house in person, I’ll still ask you to opt for both online and offline marketing. Don’t forget to leverage social media as much as possible while you’re at it. Also, upload as many pictures of the house as you can to attract your audience.
Tip – 10: Sell At A Higher Price
You should always barter the house at a higher price than the accumulation of the renovation and buying cost. Even if you can’t make the sale right now, don’t panic. Try to hold onto the property as long as you can and sell it when the market’s up again.
Mike Tyson once famously said, “everyone has a plan until they get punched in the face.” And, if you consider how the fix-and-flip market usually runs, you’ll find some relevance in the quote too. However, here’s what I think.
I know that no plan is perfect.
But, having some sort of idea about the industry before making a move is surely important. Or else, you’ll surely get punched by an otherwise avoidable error.