Whether it’s your first flip or your 50th, you want to maximize profits and get the most out of your investment. But where do you start? It’s much more attainable than you realize, once you know the trade tips and tricks. If you want to reap the financial rewards of flipping homes, be sure to do what the pros do! For starters, purchase a house in the perfect area and analyze the market. Once you have the home, follow this guide to maximize your profit and get the most bang for your buck.
Choose the Perfect Real Estate Agent
By now, you’ve probably had dozens of real estate agents referred to you. You’ve been told each one is the best real estate agent around. If they aren’t an expert in the house-flipping real estate market, you probably want to find a different realtor. Look for a real estate agent with experience buying and selling flips. They’ll help you choose the house with the best return on investment.
It’s All About Location
You’ve heard professionals in the housing industry say, “Location, location, location,” and it’s true. You can dream up the best-looking house on the block, but if the neighborhood is in a high-crime area, you may find yourself struggling to sell it. When looking for fix and flip homes, begin by taking a look at other homes in the area. Are there a lot of homes for sale, without and buyers? Perhaps the local economy is struggling, or schools are lacking. Maybe crime rates are exceptionally high. Do your research and check out the area before committing to a location.
If you find a home for sale in an up-and-coming town with good schools and a thriving economy, you’ll have a higher chance of turning a profit. Don’t aim to sell the best house in a bad neighborhood. Look to purchase a home in a great area. It may cost you a little more, to begin with, but you’ll make your money back if you buy and sell when the housing market is right. Choosing a home that’s hard to sell will only cost you financial hardship if you have to carry two mortgages, pay two sets of utility bills, and taxes to two townships.
Analyze the Market
Make sure to purchase a house with the potential to generate a profit. How much is the house selling for? What are other homes in the area selling for? How much will you have to invest to turn a profit? One way of analyzing the market is by researching comparables in the area. These houses are either on the market or have currently sold, and can help you get a feel for what you can expect to sell your property for. Once you’ve found a great location, start looking for the most affordable house you can find. Once you do, don’t go overboard with renovations.
Make Affordable Renovations When Flipping Homes
Make upgrades to appeal to potential buyers, but not to the point where it causes you to lose out on your profit margin. For example, choose building-grade products such as middle-of-the-road carpet and prefabricated cabinetry for kitchens and bathrooms, instead of the most expensive items. However, if you’re flipping a house in an affluent area, you may have to spend a little more, but don’t go too crazy. Ask to speak with managers at supply stores to see if they have any discontinued items you can get at closeout prices.
When renovating, it’s best to focus on kitchens and bathrooms. Potential buyers tend to look for these areas to be updated, as they can be the most expensive. Paint and carpet are cosmetic and should be the least expensive of the repairs, but make sure to do both to give the home a fresh and clean appearance.
Fix and Flip Loans
Flipping a house is an excellent way of turning a substantial profit. Still, it requires a good amount of resources out of pocket. You never know what you’re going to encounter until you start your renovation, and it’s crucial to be prepared. Fix and flip loans provide you with the means to renovate your property to turn a profit without having to drain your personal savings account. Don’t let a lack of personal funds prevent your project from moving forward. A loan will allow you the resources to keep your project steadily progressing so you can renovate, sell, and continue to flip homes.
When you flip homes for sale, remember that the granite countertops you want to install may not be the taste of potential buyers. Keep a neutral palette, and stick to a reasonable budget when choosing things like countertops. There are different projects and upgrades that buyers are looking for and they change from year to year. Before making any major renovation decisions, it’s best to know what the most current renovation reports have to say, so you know what prospective buyers are looking for in a house. So, before you paint every room a different color of the rainbow, do your homework and find out what colors sell, and which don’t.
Hire an Inspector
You may know what to look for in terms of apparent flaws and defects. Still, a professional home inspector will look for things that may not be visible to the untrained eye. For example, underground oil tanks can be a significant expense if a leak is detected. If so, ground contamination will need to be addressed and can cost tens of thousands of dollars, if not more. In addition to being a substantial financial burden, removing abandoned oil tanks and contaminated soil can take months, if not longer. Foundation cracks and leaking chimneys are other significant defects that may cost you more than you’re looking to spend, so be sure to hire a home inspector when flipping homes. This protects you and your future investments.
Get Ready to Maximize Your Profit
Now that you know how to maximize profits, you’re ready to start flipping homes. Remember to look for houses in a great location, and to use flip and fix loans to help you finance your investment.
If you’re looking for a loan to help you with your real estate project, contact us today, and we’ll be happy to discuss your financing options. For every project, there’s a solution. Let us help you find yours.