The many TV shows, news reports radio commercials etc made “house flipping” become popular, but unlike those shows it is not as easy as it seems. It takes hard work, education and experience to flip a house.
Flipping a house takes courage and can be a risk. It can broken down in basic steps. The most important step when it comes to flipping a house is budgeting.
1. Find a property
After you decide whether you want to flip a new home or an older one, you have to look for the right neighborhood. Do research to find out what other people are asking for houses there, and find out whether other investors have tried to flip houses in the area and how long it took them to turn the houses around.
2. Do a comparative market analysis
Before putting in an offer to buy a distressed property whether bank owned, an estate or a short sale, it should be determined what the house will sell for once it is completely remodeled and or renovated. A licensed realtor can assist in doing a comparative market analysis to find out what an ideal listing price should be.
3. Due Diligence
Once offer is accepted, do home inspection and necessary due diligence to find out if there are any material defects that can increase fix up cost substantially. Examples are bad sewer line, roof replacement, mechanical defects and or structural repairs.
4. Budgeting – Fix up cost, selling cost etc
If you know how to do the necessary work yourself you’ll save some money; if not, figure the cost of labor onto the cost of the renovation materials. Once you have a budget for fix up cost – stick to it. Other costs that should be taken into consideration are selling cost, carrying cost, overhead and supervision. All the above cost will affect your bottom line.
Kitchens and bathrooms are your most important focal points in order to bring in a higher return. That can mean new cabinets, counters, sinks, backsplashes, appliances, floors and lighting. Don’t forget the outside and curb appeal. The outside of the house is the first thing potential buyers see. Consider whether the house needs a new coat of paint, gutters, fence and whether the driveway has to be repaved and how the landscape looks.
6. Selling the house
Find a licensed realtor to assist in listing the house. A good seasoned realtor working with investors would be ideal. He or she will understand the market place and how to turn your rehab/flip into good profit.
Contact CO-RE Group to assist, from buying the distressed property, home inspections, remodeling consultation and to selling it! 719.219.9739
Check out properties that were recently flipped by us! www.inclineinvestments.com