House flipping sounds like an easy and straightforward concept. But there is much more to finding a cheap house, purchasing it, and selling it for a profit. If it were that easy, the market would be over-saturated with house flipping real estate investors. A great deal of work goes into successfully flipping houses. Here are a few tips to consider before getting started.
Research Your Local Real Estate Market
Before purchasing a property to flip, it is important to know if your property is in an area where people want to live. Is it in an up-and-coming neighborhood? Is it in an area where people want to live? Thinking about these factors could determine your success or failure. No fix and flip investor wants the burden of a property that doesn’t sell. The objective is to flip quickly and understanding the market is an important factor in making sure that happens.
Examine Your Options for Financing
After researching the market and finding a property, now it is time to finance the deal. There are many ways to finance a real estate project. If an investor has enough cash on hand, they may fund the deal themselves. Leveraging may be an option for an investor that has equity in a property that they already own. Additionally, a hard money loan can be a great option for someone who wishes to fix and flip a property.
Know the Cost
Depending on the property, the cost to repair a home for reselling can rise very quickly. One key factor to success can be knowing what repairs and improvements will add value to the property. Landscaping, upgrading appliances, and painting the exterior are just a few things to consider when preparing a fix and flip for reselling. Many real estate investors save money by making small repairs themselves while others prefer to hire contractors to do the work. Regardless of how the improvements are made, it is imperative that the work adds value.
Final Thoughts
Flipping houses does not come without risks. However, when informed decisions are made, the return on investment can be rewarding. Always perform due diligence and consult financial and legal professionals for sound advice.
The information provided is not investment, tax, financial or legal advice. Consult with a licensed professional.
Investor Loan Source, a private money lending company, provides high-quality investment property loans to private real estate investors at the lowest costs possible. Our process for providing real estate investors with private lending is unique. We place emphasis on the hard asset and value of the collateral (property) and less on the borrower. Our asset-based real estate investment loan model means we can provide more money lending to more investors than is available from standard bank loan models. At Investor Loan Source, providing real estate investors hard money loans is our business; it’s all we do. We offer several business real estate loans products designed to serve a variety of investors and property profiles, including private money lending for properties to sell on owner finance.