Flipping Properties is a viable business however there it is very competative and should not be explored as a part time job. To be successful, you have to be committed to knowing your market and have a network in place that will help you compete.
Tips and Advice. Here are some tips to save you time and money:
1) Know your Margins on Flips. Be firm on your margins. This concept is more than just sticking to your buy rate. Put a value on your time and money. If you can make your margins after being honest with what it takes to get the house prepared, then the house is worth buying. If you are planning to sell through a Realtor, you should not pay more than $0.75 to the Dollar off the projected sales price.
2) Don’t flip in rental neighborhoods. Rental neighborhoods do not sell well for flips. Make sure you know the difference. You need to comp the neighborhood first and then within a 1-mile radius from the house.
3) Don’t skimp on the MLS. Many flippers pay too much and then try to sell the home themselves. You need to be on the Multiple Listing Service…PERIOD! You can buy big signs and potentially save some money, but it’s going to take a lot longer. Being on the MLS is hands down the best way to get your home in front of qualified buyers.
4) Great Price = Great Deal? Getting a great price doesn’t always translate to a great deal in this market. Your justification for buying a home needs to go beyond what you perceive to be a great price.
5) Under/Over Improvements. Be aware that your buyers’ lender will likely kill the deal if the home is not functionally intact. That old roof is probably not good enough. You can’t leave the floors for the buyer to do after closing. The little wood rot needs to be repaired. Know what needs to be done so your home is not Dead On Arrival. At the same time, you don’t want to over-improve the home because the appraisers aren’t going to give you value. You should do enough to pass financing inspections and distinguish yourself to attract an offer from a buyer.
6) Anticipate the Appraisal. The appraiser is going to look for other properties in similar condition to use as comparables. Know which properties have sold and are pending sales within a mile of your home. Know how to adjust a comparable to determine if it’s similar enough to support your target sales price. Remember you are pushing the market with a quality home and the lenders want ample evidence to support the higher value. The absense of comparables within your appraisal area will make it hard to support your price.
CALL US TODAY for help at 407-740-0993 or sign up to join our mailing list. It is impossible to compete without making this your full-time job. Let’s us do what we do best so you can focus on your investments.
