Oxstones Investment Club™
Maybe you’ve seen some – make millions by just flipping houses – ads and stories on the television. This thought sure is exciting and enticing – but is it really possible to become rich from renovations? The simple answer is an absolute yes.
In this article, let me share you some of the basic factors and major areas affecting the score and value of the flipping houses that you should be aware of to help you receive top dollars.
Thoroughly research about the real estate market on your location
Having a high degree of knowledge about the local real estate market can let you have the ability to make money just by flipping or renovating houses. To know if a given property can make a good deal is to know its market value and compared it to the different homes in the area based on their market value. Getting a real estate license will worth your time because you’ll have the access to the local multiple listing services.
It will allow you to have access to both selling and asking prices and notify you as soon as the property comes on the market to help you find real and high profitable deals.
You need to buy properties at deep discounts or below the prevailing market
This step is commonly overlooked by some real estate professionals and even some building and civil contractors from companies that should never be taken lightly. Buying a given property at deep discounts is another way to make money on flipping or renovating homes. The difference between the wholesale price and retail price of the given property should (and must) provide enough and sufficient profit and financials to cover the renovation of the property.
Keep in mind that you can never by flipping homes based on your personal and emotional factors. For example, thinking like – “I really like this houses” can’t help you in your success as it purely relies on the numbers and market values, so you have to be constant about this decision.
As a real estate agent, you should be able to rent out the profitability of the property
As you stay in the house renovation or flipping business for a long time, you might get stuck with a property that is difficult to sell. Eventually, if that happens, you need to rent it out and wait until a suitable home buyer can be found. To do that, you need to have the certainty to rent out the house or property’s profitability. Aforementioned, you should also have a thorough and deep understanding of the local real estate market as well as knowing the market values of the comparable properties in the area.
Keep in mind that when buying flipping houses, it should always be in good condition for both selling and rental. It should be also sufficient to cover the different factors such as taxes, insurance on the house, interest, principal, and an extra to generate a profit.
Determine and compute the maintenance and repairs costs
The chances that you’re not the only house flipper in a certain community or area can be high which is why you need to step up your competition and bidding wars to develop well-priced properties. This could mean finding good and highly profitable deals as quick as your competitors. And for that reason, you need to determine the proper ideas to repair and maintain a property.
Additionally, you should also have a reasonable ballpark for the repair costs. If you don’t have enough experience in home repair and remodeling, you might consider creating a panel of professionals that have the knowledge and resources for home flipping and they must be contacted on short notice. Remember, a good deal will become unprofitable if the repair costs exceed the property’s market value. You can contact a construction Company if you are ready to renovate your house.
You might need to put up high investment
Typically, some mortgage lenders don’t lend more than 80% of the non-owner and occupied house’s value. So you should expect that you might need to make at least 20% down payment each property. You will basically need to have high financial support for repairs to get into the equity line of credit on a non-owner occupied property.
Conclusion:
All in all, you can definitely make money by renovating or flipping houses, however, there’s a lot more to it – from understanding how the local real estate market works to knowing a given property’s market value. You need to have the deep understanding of these several factors in order to achieve one goal – to obtain top dollars and get rich.
Tags: flipping homes for profit, lessons on how to profitably flip homes, local real estate values and construction expertise are important for house flipping business, proper ballpark estimates for home repairs and maintenance costs are critical for successful value-added real estate strategies, property, real estate tips, renovations, the art of flipping real estate, value-added properties, value-added real estate strategies involved local real estate knowledge on valuations and construction costs