Real estate investments are a great way to create equity and cash flow, depending on what type of investing you’re doing. Flipping houses can be tempting for people who are looking for a (relatively) quick and secure way to improve their income. You find cheap houses for sale in your market, put in the work to fix them up, then turn and sell them for a profit.
You can use the income from the sale to purchase another home to flip or you can walk away with some extra cash. If you’ve never flipped a house, you might not know what you’re in for. Here are five expert tips for newbies looking to succeed in the house flipping world.
1. Make Sure You’re Financially Ready To Flip
Since this is a form of investing, you need to make sure you’re financially prepared to buy a home to flip. You’ll need a good credit score and enough cash to make a sizable down payment and pay for the home repairs. Flippers try to put a good amount down on a house while still having funds for the flip. This allows them to avoid any issues with paying contractors or mortgage insurance, which you aren’t forced to pay if your down payment is a certain amount.
You’ll also want to be financially prepared for what might happen if you can’t sell the home right away. Ultimately, you’ll need a buyer and you can’t bank on someone snatching up the home right when you list it. Have a plan for what you’ll do if the finished house sits for a bit.
2. Learn Everything You Can About The Market In Your Area
Before you purchase a home to flip, look at the market. You’ll want to find a house in a desirable neighborhood. People might be trying to move to this school district or it might be a safe area. Not only will it be easier to sell a house in this area, but it might fetch a higher price since more people are looking to live here.
Avoid areas with a large number of homes for sale since this could be a sign that houses in that neighborhood aren’t selling quickly. Learning about the market will help you determine the type of house people are looking for and the area in which buyers want to live.
3. Hire Contractors You Trust
Few home flippers do all the work themselves. Most decide to hire contractors and technicians they trust to do the important work. If the home needs a new roof, Google “Pittsburgh Roofing” and find skilled roofers in your area. You’ll want to find a company that offers warranties, great customer service, and high-quality materials. Even though you won’t be living in the home yourself, you want to take the same care with hiring contractors as you would when hiring people to work on your own home.
Your buyer should be impressed by the great job the company did, not dismayed that you’ve cut corners. Look for experts who can install custom ductwork in Ottsville, PA and your flipped home will be in great hands.
4. Find Potential Buyers
As you near the end of repairs (or even before you start!), you may want to start finding potential buyers, especially if you plan to list the home yourself. If you can line up a buyer from the beginning, you won’t have to worry about the home sitting on the market after it’s done. Networking with potential buyers will also help you line up future deals if you’re interested in flipping more homes.
5. Stage Your Home Well Or Work With A Great Realtor
When it comes time to sell, you could list it yourself. If you do, make sure it’s staged well and do everything you can to draw in buyers. If you’re burnt out from working on the house, hire a great realtor. He or she can make sure the home is ready to go and will organize open houses.
Flipping homes is a great way to earn extra money, but it isn’t something that should be taken on lightly. Do your research and decide if you’re ready to start investing in real estate. You might find this is the perfect career for you.
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