You may have seen the house-flipping TV shows. Perhaps you’re a handy person who loves to renovate homes. Maybe you’re just intrigued by buying and selling homes for profit. Whatever the case, we’ve put together the following guide to house flipping for beginners just for you!
6 Tips for House Flipping for Beginners
House flipping can be very rewarding in many ways. Of course, there’s the potential for income, but you may also be able to indulge your passion for home renovations, interior decorating or simply being a real estate investor.
But, regardless of the potential rewards, you need to make smart decisions to enjoy them. The following tips will help you do just that.
Do Your Research
The more you know about real estate markets, locations, and how to assess repairs and renovations, the better. Many seasoned house flippers work closely with real estate agents. Realtors know local market conditions, which houses are better suited for flipping, and they find out as soon as those homes are listed on the market.
Get Your Financing in Order
One of the secrets to successful house flipping is to quickly pull the trigger on the right deal. There’s competition out there and when a good candidate for house flipping gets the list, it doesn’t last long. So you need to know you can buy when the time comes. IN addition to mortgage pre-approval, you need to know you can cover the costs of any renovations. If not, you might be faced with the costs of carrying the home longer than you budgeted for.
Consider Having a Renovation Team in Place
First, if the real estate market is right, you can flip a house without renovating it. However, even in those conditions, improving the home can add significantly to your profit. But, if you like to work on your own, the time it takes before you can re-list the house can quickly erode your profits. You might think it’s more costly to hire contractors to help you, but it might actually be more costly to do things on your own.
Stay on Top of Schedules & Logistics
The turnaround time in a house flip is crucial. Again, the longer it takes to flip, the lower your profits. With the closing date as your starting point, you need to set a schedule for yourself, and anyone helping you. This can get complicated because certain trades need to be scheduled before or after others. You also need to source, acquire and deliver all materials, tools and supplies needed for the project. Finally, add some wiggle room in your schedule and budget for things to go wrong.
Be Ready to Sell
This is another step where a reliable real estate agent can make a big difference in the success of your flip. Let’s say everything fell into place for you. You found the right home, closed the deal, set up the renovations, and finished them on time. You still haven’t made any money until you sell the home. The longer it takes to sell, the lower your profit margins.
More Benefits of Partnering with a Real Estate Expert
If you really want to get into house flipping, you need to know how to make it work even when markets aren’t ideal. The right real estate agent can help you broaden your time windows for making a profit. Think about the following. If you found an agent who negotiates just a 1% better price on the purchase of a $1,000.000 home, and a 1% better price when you sell the flipped home for $1,200,000. That’s $22,000 more profit for you.
If you’re looking for Markham, Richmond Hill or Vaughan houses for sale that might be good candidates for flipping, get in touch with The Tar Team today.
Want to learn which home improvements are better when you flip a home? Check out our article “5 of the Best Home Improvements for Resale Value“.