House flipping is a lucrative business, but it can be daunting for first-timers who are just getting their feet wet. For beginners, it can be helpful to learn the answers to some of the most common flipping questions so that they can avoid making mistakes and enjoy the process instead. Successful house flipping is not an overnight, get-rich-quick type of investment, contrary to what many believe. That’s why it’s best to start off being well informed.
These are some of the most common questions first-time fixer-uppers have, and their answers:
How To Find A Good Property?
Successful flippers use a multi-pronged approach to find properties which will likely make great deals. Foreclosed homes, bank auctions and court listings are the sources of some of the best-priced properties in the industry and should be the first stop. The idea is to look for individuals who are motivated sellers, with homes which are mostly sound but which could benefit from some renovation work.
Social media, and particularly Facebook, is another great source for great property deals with the added benefit of being easily accessible and user-friendly. Other real estate websites like Zillow and Trulia are powerful deal-finding tools because investors can set up their search criteria to match their budgets, target demographics and locations, but these options can be oversaturated by offers. Less competitive deals can be found via more traditional methods, like knocking on doors in your neighborhood or sending out postcards.
Which Improvements Are Best To Make?
Modern kitchens outfitted with the latest tech have consistently been measured to be the topmost desired part of any property for home buyers. After kitchens, bathrooms are the spaces home buyers check most carefully before deciding to purchase a property. Other prominent real estate trends have included adding lots of natural light, and exposed fixtures in distinct metals contrasted with neutral color palettes.
When surveyed, nearly 55% of potential home buyers stated that they would be willing to pay more for a property that has hardwood flooring when compared to other floor options. Hardwood floors can easily add real warmth, a touch of luxury and more value to a home.
Closets and lots of closet space have also ranked as desirable features for home buyers. Closets not only hold clothing and other essentials but also offer additional storage space which is sought after by older home buyers or home buyers with children. There are many ways to add these improvements without breaking the bank, as long as the investor is creative and puts thought into their renovations.
What’s Your Timeframe?
With any real estate project, setting a realistic timeframe is difficult, and will depend entirely on how much work needs to be done. Some fixes will be more time-consuming than others, so investors may want to think about taking advantage of a professional home inspection – this will also help make sure the overall sale will go smoothly. Some factors that can eat into your timeline include bad weather, lack of financing and scope creep.
Therefore, it is best to estimate a bit of extra time for each project to avoid working against the clock. A good rule of thumb is adding another one-third to your time estimate. Experienced flippers can run through the rehab process in as little as 90 days, but it will take some experience to get to this point.
How Long Will It Take To Sell?
Selling is another key part of the flipping process and needs to be planned for carefully. Typically, investors would want a market that doesn’t have stagnation, opting instead for markets where homes are sold quickly. Once the rehab is complete, the property needs to be resold as fast as possible. This is because the longer the property is held by the investor, the longer they are responsible for the holding costs.
House flipping can be a valuable method of making money but beginners are often intimidated when getting started. This is why it’s best to get an understanding of what the process will entail and to do research before purchasing the property. Becoming familiar with some of the in’s and out’s and questions that most new investors have can give better ideas of how the processes work and how long they will be. With a bit of hard work and smarts, a first flip can turn into a new career.