Flipping: Getting Rich Buying and Selling Real Estate
Individuals that flip real estate typically have found a quick way to get rich. The process involves purchasing a home at an inexpensive price, making significant improvements, and then selling it on the open market for much more than was originally paid. However, it may be that you are financially strapped, and cannot find the avenue to begin this profitable venture. There are alternatives to consider before deciding whether or not to invest in buying and selling real estate for flipping.
Obtaining a loan to purchase real estate that is much lower than its true value is often easier than purchasing traditional homes. Choose an area in town that is desirable where you can purchase homes inexpensively. Make sure that it has the right amenities, with no huge negative impact, like being positioned next to the landfill. This will only limit the potential buyers.
Do extensive research by talking to available real estate agents that are familiar with the area, and the viability of the current real estate market. Avoid sinking your hard-earned dollars into a home until you are 100% sure the current real estate market is solid, and you can reasonably expect a quick sale.
Once you have found a dilapidated home, or one in need of major aesthetic repairs, have it inspected to ensure it has no major structural defects. By choosing houses that need significant cosmetic improvements, such as enhancing the landscape, exterior and interior painting, new flooring, and new bathroom fixtures, you will be able to perform the work quickly.
Be sure to choose only improvements to the home that will not drain your bank account. Over time, you will become highly adept at home improvement projects and will be able to perform any of these duties yourself. You will also learn to hone your skills by using repair manuals or watching other individuals in the work they perform.
Once the home is complete, you can either sell it on the open market, or rent it out for a monthly fee. Renting the home is an ideal solution if it is not selling quickly. Be sure to ask the going rate for rent comparable to other properties in the neighborhood. The amount of rent charged every month should be at least equal to the value that someone would pay for a mortgage. Any additional funds that are collected over and above the money you have put out to purchase and improve the property can be put toward the next home for flipping.
It is highly advisable to develop positive relationships with contractors and real estate agents. Over time they will likely reduce their standard fees when working on your home, or showing you new properties to purchase. In addition, it is important to fully understand all of the building codes and regulations in your area whenever purchasing a new home.
Flipping and selling a home costs a lot of money. Typically investors have to pay cash in order to have the ability to invest into a piece of property. Once the payment is made the investor has to commit to remodeling the home and selling it for a profit. New flippers might not know what to consider before buying a home. Many homes on the market are short sales or have undergone foreclosure. Although they sell for cheap prices it might cost a lot more in the long run to remodel a home to get it sold for a decent price on the market.
The plumbing is one of the most important parts of a home. Pipes that are withered and beyond repair can cost thousands to fix. If the pipework is not in good condition then it is wise to invest into a different piece of property. Copper is better than galvanized steel when it comes to pipes for plumbing. Look for copper pipes when searching for a home to flip. Add copper to a home if you purchased the property and found a poor plumbing job after your purchase, it is better for the longevity of the property.
Another part of the home to take into consideration is the foundation. Depending on where the home is located you do not want to find a weak foundation. A home that resides on a flat service may be easy to fix, but homes on hills are going to be tough. Have an inspector check both the plumbing and foundation of a piece of property to minimize the cost of remodeling it for sale.
Research the prices of homes in the area you plan on buying real estate. Get an idea for how much real estate costs in the area you plan on investing. Avoid overpaying for property that is not worth the cost. Even if a home looks promising you do not want to pay more than you should. Part of being a good house flipper is having good negotiation skills. Try to talk down the price of a home so that you can flip it and make the most amount of profit possible. Capitalize on any deals in a given neighborhood so that you can produce the maximum amount of profit possible.
Form a relationship with a reliable contractor. You should know at least two contracting teams or companies that charge a fair price. The purpose of this is to ensure that you pay as little as possible to flip a home. Shop around for a good contractor just like you would shop around for a fairly priced home to find the best deal.
Marketing is important. Once the property is remodeled you should do everything you can to give it exposure. Make flyers, inform people in the neighborhood, post ads online, and add the property to the MLS. Transform a home and make it look as beautiful as possible and you should attract a lot of potential buyers and get the type of offers you want to see.
With a little basic knowledge, flipping homes is easy process, and one that can generate a tremendous amount of income again and again.