Firstly, let’s get the terminology right. Flipping a home means purchasing, renovating and selling in a very short time frame without ever living in the home. That’s a very different approach to purchasing, renovating while you live in the home and then selling, say in 2 years. The issues and returns are different with each scenario. So say what you mean!
When someone says that they want to view properties that can be “flipped”, we need to sit down and talk about how they really want to approach this.
Here are my quick tips:
KNOW WHAT YOU REALLY WANT TO DO! You need to be realistic in knowing what you are capable of achieving, what skills do you have, what time are you able to dedicate to this project and what your end-result objectives are.
KNOW YOUR NUMBERS!! You need to understand the financial model for flipping homes – cost of borrowing, insurance, opportunity costs, etc. You really need to have a high amount of expertise with property values in the specific area to be able to calculate what the home will sell for once it has been renovated and ready to sell in turn-key condition.
KNOW WHAT YOUR POTENITAL BUYERS REALLY WANT!! Don’t over improve the property for the area. You need to know what will get the home sold quickly and what is likely to be the best return on your investment given the type of buyers looking for homes in the area. A highly experienced agent will be invaluable here!
PUT YOUR TEAM TOGETHER BEFORE YOU START! You need to surround yourself with a team of professionals that you trust and can rely on. You will need a Home Inspector, a Lawyer, a Real Estate Agent, perhaps a Financial Advisor, a Mortgage Broker and of course, a Contractor. Unless you are an experienced contractor yourself, don’t try to take the DIY approach to flipping homes. This is not a good idea and not the best place to start!!
These are just some highlights, and there are many more points to consider.
Once you have the right recipe, flipping residential properties can be both lucrative financially and fulfilling from a creative standpoint.
The coolest part is that you are creating a nice safe, affordable home for someone.
If you are interested in flipping a house, please give me a call.