Flipping a home is a real estate investment that can provide returns quickly, AND at a great profit.💵
With all the HGTV you’ve watched, you’re probably ready to flip your own house and start knocking down some walls, right? WRONG! There is SO much more to home flipping than what is shown on the flashy TV shows! I know there is an overwhelming wealth of information on the internet, most of which is repetitive and almost discourages you when seeing headlines such as “Common Mistakes When Flipping Homes.” This article's aim is to sum up some of the information out there into small bite sized chunks, filtering out all the fluff, and focusing on what YOU really need to know when flipping a house.
Financial Risk
Knowing how to pick the right property, in the right location, for the right price, is tricky! And finding the money to do so can also be daunting. Investors are not difficult to find – they could be your banker, hairdresser, or family member, your neighbour’s kid with the lemonade stand on the front yard – well, maybe not that last one😂. When you are ready to invest in the property and start the flip, you need to be aware of financial risks. The home will likely have significant issues, even issues that might not be apparent at the first inspection. This is why you DEFINITELY should budget for surprises! Once you’ve overcome the hurdle of renovations, also be aware that there is the possibility that the property might not sell as quickly as you hoped. Having a full-service real estate agent with market knowledge is KEY.🔑
70% Rule
One of the first and most prevalent rules on the internet when searching ‘house flipping’ is the 70% rule. This rule is to help you understand how much you should spend when purchasing a fixer upper. It’s always a good idea to do the numbers beforehand – you must figure out the price the home will be worth once you put it back on the market. The 70% rule implies that when you take that market price and multiply it by 70%, minus the cost of repairs, that is the price that you should spend on the house initially. Sure, you probably would rather be pinning home inspiration photos to your Pinterest board rather than doing some unexciting math equations, BUT this rule will ensure that you will be able to take home a nice profit and become a successful flipper!
Speed = Profit
Pull out your wallet! Although you may think you’re saving money by doing some of the work yourself, this could actually end up costing you your profits. Hiring contractors and an experienced team will allow you to finish the project as quickly as possible, and speed = profit! If you hold on to a property for too long, all of the costs will start to increase, cutting into your profits. Hiring professionals might seem like a money drain when in reality, they get the job done in a professional and timely manner.
There are many more tips and tricks to flipping a house. I would be glad to give you some more information and be a helping hand! Let’s talk! Call me at 905-977-8358 or send me an email through my website!
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