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San Diego real estate library
5 House Flipping Do's
While many people have very precise dreams of enjoying the
abundant profits that can be made from flipping houses very few
people put too terribly much thought into the process or any
formulas that might be pertinent to success when it comes to
flipping houses as a real estate investment venture or for the
sake of building a nice comfortable lifestyle or retirement. You
will hear a lot about the things not to do when it comes to
flipping houses but very few people take the time to mention the
things you absolutely must do in order to successfully flip a
house and thus begin your ride on the road to real estate
investment riches.
1) Do put everything to pen and paper and plan it out carefully
before you begin. If you are going through this to make money
you need to treat it like a business. This means you need to
have a plan of action and make every effort to work towards
carrying out that plan.
2) Do determine a budget for the entire project. You need to
have a plan for how much money you are willing to invest in the
property itself, how much for renovations, and how much money
you need to make in order to be a worthy investment for your
time and labor. A house flip is a lot of work in order to pull
it off successfully. You want to have a good idea of how much
homes in the neighborhood are worth, the value of your property
as is and the estimated value of the property once improvements
are made. In addition you should also have a pretty firm grasp
of the costs involved in making the repairs in order to create a
realistic budget for the entire project.
3) Do have an inspection. This is particularly the most
important detail that can save you a great deal of time, money,
and heartache when everything is said and done. Be prepared to
walk away if the inspection determines that there is more work
needing to be done than simple cosmetic repairs. You want to
make changes that people can see because those are generally the
changes that drive up the cost of the house. You want to avoid
needing to make changes and improvements that aren't visible but
are very necessary. If you need to invest a lot of money and
labor into the house you need to seriously consider the
realistic profit potential the property offers. If it isn't
significant then you need to walk away before the property
becomes a real estate investment money pit.
4) Do become acquainted with the neighborhood and plan your flip
according to the needs of the area rather than your personal
tastes and needs in a home. This is another thing that many
first time flippers forget. This is not a personal project it is
a business project and you need to treat it as such. Keep costs
down and personal feelings out.
5) Do remember that you are in the market to make money not
waste money when it comes to formulating an asking price for the
property. You've poured blood, sweat, and probably more than a
few tears into your flip but you cannot set the value of the
property by the effort you've placed into it. Have sensible
expectations of how much you stand to earn from your efforts and
how much you are willing to go down on the price in order to
walk away with some profit in your pocket.
You should also take a moment to reflect upon the fact that many
first time flippers actually lose money on their first flip. If
you turn a profit at all, even a small profit you have learned
many precious lessons that you can carry with you into future
flips and make more money. More importantly the lessons you
learn from your first flip are lessons that money really cannot
buy so it is worth a lower profit or even taking a slight hit if
your experience makes you even more money in the future as you
continue along your real estate investment path.
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