The increasing popularity of house flipping television programs has many people thinking that they can do just the same to make large amounts of money quickly. While house-flipping can be a great investment opportunity, it also comes with a great deal of risk. If you have never flipped a house before, or you are looking to do it again, you should consider all of the options and talk to professionals before making a purchase.
Professional investors and home advisors can help all people in their ventures with house flipping. Whether you are new to the game or have done it before, consulting financial advisors before purchasing a new home could significantly increase your profits, leaving you with extra money in your pockets.
In order to make the most money you can and increase profits, many people try to buy homes with all cash. In 2017, nearly 65 percent of home flippers purchased a home with all cash. While using cash helps you avoid interest rates and longer closing times, this is likely not an option for new home flippers. Even if you do not have enough cash to finance the project yourself, you can consult with financial advisors to help you in the adventure of home flipping. Before you start trying to flip a home, you should consult with a financial advisor and follow some of these important tips.
#1) Research The Area
While a real estate agent may be able to help you decide which areas are the best to flip houses in, you should also research the area on your own as well. Relying solely on a real estate agent to do your research for you can often lead to you making the wrong purchase or being swayed one way or another. If you research the area carefully by looking into schools, buying and selling history, crime rate, similar homes for sale, and average list time, you can ensure that you will choose the right property.
#2) Secure Financing With Low Interest Rates
Before making a purchase, you should consult with a lender to find a mortgage or loan with a low-interest rate. Finding the lowest interest rate will help you keep more money in your pocket. Check to make sure that there are no hidden costs associated with the loan and hire an attorney to proofread the contract, if necessary.
#3) Stick To Your Budget
When it comes to house flipping, it is very easy to get caught up in spending more money than you initially planned for. To avoid making this critical mistake of overspending, it is crucial that you set a realistic budget before starting work and stick to that budget. You should contact inspectors or contractors in the area to give you estimates on the home before you decide to purchase the property. Make sure that you get quotes from a few different contracting companies and pick that one that you feel most comfortable with. Ask each company about the overall price, including labor and supplies, their timeline, and references.
#4) Meet Your Deadline
Similar to sticking to your budget, you also need to stick to your timeline. There will inevitably be bumps in the road that may mess up your schedule a little bit, but you should do everything that you can to stick to your deadline. If you go past your deadline you risk paying higher interest rates, spending more money on labor and equipment, losing money in taxes, and ultimately lowering your profit margins.
#5) Use A Reputable Agent
If you are not a licensed agent, you need to use a reputable agent to help you sell your home. Real estate agents have a lot of connections and can help you determine the best marketing strategy to help you sell your home for the largest profits quickly. If you are considering making a living out of house flipping, you should highly consider becoming a real estate agent to avoid paying commission. If you do not have any interest in becoming an agent, you should find a real estate agent who may be willing to lower their commission for a long-term business relationship. Giving them your business when buying and selling future homes may be enough incentive for them to reduce their commission costs.