As many of you know, we work not just with home owners, but real estate investors too, helping them maintain or rehab properties. Recently we have talked with some contacts from years past and they were negative about the possibility of doing flips in today’s market. This is absolutely not true, and in fact I think the opposite is the case. You can make deals now that two years ago would have been impossible!
There are some things to keep in mind though when you are wanting to do a flip, and here are 5 of the most essential elements. If you are just getting started in real estate investing, give me a call at 425-232-4811 and get on my list. I will be sure to call you when there is a hot deal, or when any good real estate investing seminars are coming up!
5 Essential Aspects of Flipping a House
1. Buy your flip right!
Everyone knows that the money in a real estate transaction is made at the time you buy it. Sure, you can save some money by hiring the right contractor, being thrifty with the work you have done and materials you buy, but the buy is the one that makes or breaks the deal. Always go through your checklist before you drop your offer and make sure you have accounted for all the expenses you may hit between the time you buy and the time you sell, and look at what the project will sell for!
2. Have an inspection period on your flip!
No, most sellers of flip properties don’t want to give you an inspection contingency, but you need to build in some time, some how to get your contractor in to fully assess the property. What may have looked like a great deal on a cosmetic flip, may turn into a nightmare when you find out the plumbing is rusted out galvanized pipes, or the foundation is rotten. Having a pro come through and inspect your flip will guard against these surprises. We can’t catch them all of course, but it better to try and find them, than just hope for the best!
3. Don’t try and do the flip work yourself!
It may look like fun on ‘Flip that House’ to get in and tear a house apart and put it back together, but take if from a professional, don’t! Spend your time marketing, searching for more flips, networking, ect. Let your professional construction people do the dirty work. We will do it faster, with better results than you can. I am not trying to be insulting, but it is just a fact that the professionals work on houses every day and have it down. Remember, the faster the house is done, the faster it is sold. You may be able to do the work on the flip, but every week extra it takes is money out of your pocket, and time lost that you could be using to find your next flip!
4. Price your flip to sell!
Again, money loves speed, so don’t price your flip too high! If you planning on making serious money with flips, then it only makes sense that the more of them you do, the more money you make. Price your flip firmly 10% or more under market to get offers coming in. The last thing you want is a flip property, paid for with hard money, sitting on the market for 3-6 months!
5. Use a damn good real estate agent!
Picking the wrong real estate agent will kill your chances of making a profit, as will trying to sell a flip on your own. Unless you have a buyer lined up for your flip prior to finishing it (or before you buy it) then listing it with a kick-ass real estate agent is the smartest thing you can do. A good agent will give you solid comps so you can price it right, and will keep deals going once you have a buyer on the line. I can’t tell you how many times I have seen bad agents tank sales. If you are in the Seattle area I would more than highly recommend Jacqueline Cliff as your expert flip real estate agent. She will do a fantastic job of marketing and selling your flip.
Obviously this is just an overview of what to do if you want a successful flip. If you are serious about getting into real estate and doing flips, then give me a call at 425-232-4811. I can help hook you up with what you need to do flips and other types of real estate investing right!
(And of course help you put them in market ready shape!)