More than 300,000 houses were flipped in 2021. This is a way to invest in real estate that attracts a lot of people. However, thinking about flipping property and doing it are two different things.
If you want to flip homes successfully, it starts with an understanding of real estate as a whole, so that you are able to get results and earn money.
These tips will help you when you're interested in becoming a flipper and selling your home fast and for profit.
Understand What it Means to Be a House Flipper
There are a variety of methods to invest in property, but becoming a house flipper is easily among the most intriguing and potentially lucrative. House flipping essentially means buying a property at a low price, making improvements to raise the value, and then selling it for far more money.
This is a form of real estate investing that attracts people for plenty of reasons, including:
The Profits Are Quick and Substantial
People love flipping properties because of the real potential to quickly grow their net worth. These are short sales that let you get your profits in a lump sum, rather than small amounts on an ongoing basis like with a rental property.
It's arguably the most exciting form of real estate investing, as flippers can pocket five to six figures of profits in an incredibly short amount of time.
You need to make sure that the value of your real estate is worth the flip. Though you're only going to be adding it to your property portfolio for a short period, make sure you do your due diligence so that you can get the end results that you desire.
Flipping Teaches You All About Real Estate
For many people, buying and selling your home are the only times that they encounter and learn about real estate. When you flip properties, you will get a comprehensive understanding of the business so that you can become a long-time investor.
It teaches you the business and investing end of the property so that you understand things both from owners' and consumers' points of view. This can be the first step toward your wealth-building journey since real estate is one of the most productive ways to build your net worth. It'll teach you the ropes so that you are in a better position to make investment decisions that can secure your financial future.
You Don't Need a Degree or Credentials
The beauty of flipping properties is that there is no barrier to entry. As long as you understand the process and follow all of the necessary rules and laws, you can begin building your real estate empire one flip at a time.
There's no need for a degree, license, or any other steps to sell a home to the public. Training and education can help to make you more effective, but you can take solace in the fact that this is a career path that gets results without you having to wait years to get started.
Flipping Grows Your Professional Network
Real estate brings together people from all areas of interest and all walks of life like no other business. We all need a place to live, and there are often several different professionals involved with making transactions go through.
You will start to build a strong network of professionals like real estate agents, lawyers, repair contractors, interior designers, and other pros. Whether you need these professionals to directly help you with your flips or just want a valuable ally to have in your list of phone contacts, you will be glad to have a growing network.
Finding the Right Property
Now that you know the benefits of flipping properties, it's time to get started in earnest. This happens first and foremost when you find a winning property that you have a great chance of selling.
These tips will help you get to know the steps for finding this property:
Start With a Budget
Before anything, make sure that you have a budget for the property that you are going to flip. Even if a property is worthwhile, you still need to consider the amount of money that you're going to invest in it and the potential asking price you can sell it for. Having a strict budget in place will help you make an investment that will pay off.
Consider whether you're buying a fixer-upper or a property that just needs a couple of upgrades. After budgeting for the home purchase, you need to also set a limit for how much you can spend on the upgrades.
Get your credit in order and explore all of your lending options so that you're clear on how you will finance it all. The more avenues you have for securing properties, the more you can make it worth your while.
Make Sure the Property Has Plenty of Potential
Getting a return on investment (ROI) needs to be the main order of business when you're flipping properties. You can only do this when the property has a lot of potential. When a property has potential, a small upgrade can go a long way toward achieving a sale.
Study the current property values and the property values of the surrounding neighborhood and zip code. Consider the state of housing right now and which areas are on the rise and attracting more residents.
Seek an Inspection and Valuation
Before closing on a home that you're going to flip, get it inspected by a professional. This professional will look into things like the Heating Ventilation and Air Conditioning (HVAC) system, electrical wiring, plumbing, foundation, landscape, roof, and other important factors.
Make sure to also get a valuation for the property so that you know how much equity it holds and how much you can expect to get for it in today's market. Handling these two issues upfront will prevent you from wasting money on a property that won't sell.
Determine What Fixes Are Necessary
Keep in mind that flipping a home doesn't mean that you need to fix every single thing wrong with it. Have a core set of upgrades that you know will give you a substantial return.
Once you know what upgrades will be made, look into the professionals that can address the work for you so that you know it's done correctly and to get amazing results.
Handling Your House Flip
It's time to start thinking about profits when you're interested in flipping a home. After you have found a handful of property candidates, push forward with the right tips.
Here's how to finish the process:
Set Goals and a Timetable for the Flip
Many flippers struggle because their goals were not clear on the front end. Aside from the goal of just selling the house, set a price point that you won't go under, a timetable for selling it, profit margins, and other goals.
Nailing down these details will keep you on track so that you're not spending too much time on one home.
Put Together a Team of Professionals
The success or failure of your flip will largely depend on the craftsmanship applied. Comb through some renovation contractors' portfolios to see examples of previous work they have done. Talk to a real estate lawyer to ask for their advice on the flip and to know what details you need to address before moving the process forward.
Once you are confident you have the right team of pros, you can push toward closing on the property.
Complete the Purchase
Your team of professionals will be most valuable to you during the closing process. Go through every detail with a fine-toothed comb until you close on it and can sell it to an eager buyer.
Keep accurate records of the process and make sure to insure the home in the interim.
Market and Sell the Property
Finally, get as many eyeballs and impressions on your property as you can. Marketing your property will help you find serious buyers so that you can get the home off the market in the shortest amount of time possible.
Take plenty of photo and video content and consider putting together a 3D tour. You might use things like aerial photography and aerial video to sell your home quickly.
Work with agents that are skilled at selling properties and negotiating the most profitable prices on your behalf.
Selling Your Home Quickly and for Profit
These tips are worthwhile when you're learning all about selling your home in a way that gets you a quick flip that is worth your time. It's a valuable form of property investing that can help you grow wealth for years to come.
Hommati can help you with all of your real estate needs. Take time out to contact us when you're looking for homes for sale, real estate agents, 3D tours, and more.