5 Things To Consider Before You Flip A House
House flipping has become one of the latest home improvement trends over the years. People have started flipping houses as a hobby or a way to make extra money. While popular house flipping TV shows make it look easy there are some things to consider before diving into this new trend.
What is your goal for this project? Really take time to come up with a plan and what you want to do. This will help you stay focused and will make flipping a house possible. What do you hope to gain by flipping a house? This will determine where to purchase, the kind of house to consider, the time frame to complete and sell the project, etc.
While flipping a house usually means purchasing bank owned houses that are often rundown, it still is going to cost you on the front end until the home is sold. Assess your finances. How much have other renovated homes sold form in the neighborhood? Since banks don’t generally like to fund flips, seeking a hard money lender or a partnership are options to consider. It's important to put together a budget to keep from overspending and to ensure appropriate profit after the sell. You will also want to make sure you put together a plan B if the flip doesn't sell within the time or amount desired. By putting together a cost analyses of the potential flip, you will be able to asses both an optimistic and pessimistic result of your potential project. This will help you prepare and be successful regardless of the outcome.
Do your homework
Like all big decisions, it’s important that you do your research. Take your time to thoroughly search for an appropriate flip for you and your situation. Choosing the right house based on your personal strategy is key to success.
Do a cost analyses of the project from an optimistic and realistic point of view. This will help you to assess everything and anything that could happen and will help you be prepared in case something goes wrong.
A great way to find out an estimate on the price you are going to pay is to talk with a realtor. A realtor can provide you with detailed information on the cost of homes in that area, how much your repairs could bring up the home value, interest rates and where the housing market may be headed. Another source is contractors. A general contractor should be able to inform you on the cost of the repairs and how much value you may be able to add to the home.
Inform yourself as much as possible before you dive into house flipping. Be sure to talk with a realtor, architect, or contractor to fully understand what you’re getting into. House flipping can be a fun hobby to pick up and a great way to make some extra cash but it’s also a lot of work.