How Real Estate Investors Can Make Money Flipping Houses
You don’t want to lose money when flipping houses, you want to make money flipping houses! Here are a few ways you can save money on your fix-and-flip investments:
There is no room for guesswork when it comes to flipping houses. When you’ve done all of your research and found the perfect property to fix and flip, the next thing you should do is get an inspector. The inspector will look at the property and tell you just how much it is worth and how much the renovations will cost. This is the information you will need to create your budget for the project. You will need to calculate taxes, utilities and maintenance on the home for up to a year. It should not take more than a year to fix and flip a property. Having a professional and objective inspector assess the costs of your investment will keep you from underestimating how much you will spend overall.
Know the Market
You can do research on the market by looking at comps in the area. Comps are other similar homes in the vicinity that have been sold or are currently on the market. If there are a lot of homes in the area on the market, it probably isn’t a good place to buy. Look and see if there were a lot of homes that were sold quickly in the area to find out if it is a good area to invest in. Check and see the average days on the market and any recent sales in the area to see if there is a high demand.
Get the Right Financing
Hard money loans are the principal form of financing when it comes to flipping properties. Hard money loans are ideal for house flippers because you can be approved quickly and you can get your financing in a matter of days. Here are just a few reasons why you should choose hard money loans:
- Convenience: Because of the new regulations on mortgage lending, applying for a mortgage takes month which makes it difficult for investors to jump on profitable investments. Hard money loans are fast and time is everything if you’re funding a large development project.
- Flexibility: Since hard money loans are offered by private lenders, you can negotiate the terms in order for you to get the loan that works best for your interest. Banks are not nearly as flexible in their terms.
- Collateral : The property itself serves as collateral for the loan in the case of hard money loans. However, you can still find that some lenders are flexible in that respect. Some lenders may allow you to secure the loan using your own assets, such as a retirement account or a residential property you own.