Money is made at the buy, not the sell of your flip. When flipping a house your money is made at the purchase not at the sell of the house. So, many times people buy a house with the intensions of making a huge profit only to find out that they could not make any money after all the renovations because the purchased price of the house was to high.
1. Money is made at the buy, not the sell of your flip. When flipping a house your money is made at the purchase not at the sell of the house. So, many times people buy a house with the intensions of making a huge profit only to find out that they could not make any money after all the renovations because the purchased price of the house was to high. When you purchase your property you need to be sure that you can buy the house with enough money to make renovations, have carrying cost, and add 10% for surprises.
2. Get an inspection on the home - Get a complete inspection done on your property. By, spending a few hundred dollars on this expense you can save thousands in problems that you cannot see. Foundation, Pest, Wood Rot, Etc... By, getting a full inspection you can rest assured that you know every thing that is wrong with the property before its to late. In the contact for the house you need to make sure that you have 7 days to have a inspection preformed, and if the inspection finds problems that are going to cost more money that you are willing to spend you can get out of the contract with no penalties.
3. Don't do the work yourself: - Get a contractor or several sub-contractors and have the work done quickly. You need to have the house flipped ASAP, so you can get it on the market and get it sold. When I started flipping my siste and me did a house together, and we did all the renovations. I had a construction background and figured it would save thousands, but it took us over 4 months but an experienced contractor would complete in 1 month. But, in trying to save money it costs us money. On our 2nd flip we used contractors for almost everything and had the house completely flipped with a new roof, new air conditioning, new hardwood, and much more in only 3 weeks. We did not have to spend all our time working on the property and were able to spend that time looking for the next deal. This is how you get rich in real estate.
4. Place the property 1-2% below market value: If you are want to flip real estate and make money the object is to buy and sell the property as quickly as possible, so that you can move on to the next property. If you purchase a house and try to sell it at top dollar to make and extra couple of thousand dollars on your flip, and end up holding it for 6 months you are loosing money. Get the house on the market at a price that is going to blow the competition away, and sell it no matter the market conditions. On our second flip, the market was tightening due to massive foreclosures. We were told that you could not sell a property in this market, but we went ahead anyway and flipped our house. After 3 weeks on the market we had 3 people wanting to buy the house. Why, because we offered it at such a great deal that people wanted to jump on it. That is what you have to do especially if the market is slow.
5. Use a real estate agent - Do not try to sell the property on your own. Harness the power of a real estate agent and the power of MLS. When you do a For Sale By Owner you are depending on people driving by your house and seeing a sign. However, with a real estate agent you have some one actively marketing the property until it sells. Once again this will free up more time for you to look for more great deals. If you want to speed up the process I have found that Craigslist and Google Adwords helps, but I use these tools with the help of a agent to make sure I have all my bases covered.