Are you looking into flipping a house, but not sure how to do it the right way? Flipping a house, also known as buying a fixer or run-down property below market price, somehow increasing its value, and in turn re-selling it for a profit. If you do your homework, you can possibly make $50,000 or more per flip, in less than 90 days.
In order to flip the house the right way, you will first want to make sure you have excellent credit. Doing so before you find a house to purchase will save you a lot of valuable time. When flipping a house, in most cases you will have to borrow more money than you would on a normal purchase, because you will not be paying a mortgage on the flip. After you have looked over your credit, it is now time to find a Realtor to help you in the search of and purchase of your new investment property. In today’s market there are plenty of foesclosures and short sales on the market that it shouldn’t take too long to find something worth investing in. The Realtor will help you with placing and offer and getting approved for loan. Before diving into flipping a home, make sure it is a good market to do so. Your Realtor can assist you in this as well.
When looking for a home to flip, you want to preferably find one that is a fixer, one that needs work. Light work, or heavy work it really up to you. It will all depend on home much time and money you have to work with. The lighter the fixer, the faster turn around time you will have, and initially spending less money. Also, looking for a property that is being foreclsoed or short sold by the bank, is a good idea. These homes are being sold well below market value and could usually use a little TLC.
Once you have found the home of your choice, you will want to obtain a loan from the bank. You will want to get a loan that is well over the amount of the asking proce of the property, to ensure you have enough money to work with to make necessary repairs on the home. Lastly you will want to make a reasonable offer on the property and purchase.
Once you are the proud owner, begin to repair the house, and get it ready for re-sale. A key thing, is to save as much money as possible on labor. Find family or friends who are willing to help with this process. When all repairs are made on the house, you will then be ready to stage it. A home always shows better when staged with a little bit of furniture and décor. This gives prosepcts a better idea of what the home will look like when they move in, making it more desireable to them, in turn flipping the home quicker.
Once the home is staged, it is ready to show. Speak with your agent about the different ways they plan on driving clients to the home. When you receive a buyer, they will submit a reasonable offer, and you and your agent will work together to see if you are getting the most for your home. You are going to want to make sure that the price of the home and the offer are well above the amount that you paid for the home. This will guarentee you a high profit, for all the time and labor you invested in the home.
When the home sells, the first thing you want to do is, payoff the loan and any other debt you have incured during the time of the flip. You also want to make sure that you report any profit you made to the IRS to avoid any penalty in the future.
Flipping houses is always a very risky thing. If you don’t floow the above steps properly or consult your Real Estate Agent, you could petentially lose hundreds or even thousands of dollars.