Investing in real estate, doing them up and selling them on for a profit is becoming an ever more popular way of making a living, so if you have been thinking about flipping houses, you are hardly in a minority. This means that you will need to be able to compete with other entrepreneurs if you want to a successful real estate investor.
Here are some things you need to know before you start flipping houses:
What You Need
If you want to start flipping houses, first and foremost, you will need to have a very good credit score. Home loans for people who are looking to complete a house flip, which is deemed high risk, have tighter restrictions on them, which means that unless you have a very high score, it’s unlikely you’ll be able to get the finance you need.
In order to secure finance, you will also need a healthy down payment, which will get rid of the need to take out a private mortgage insurance policy. So, Ideally, you should save as much money as possible before you get started.
Before you buy your first house for flipping, you should also bone up on the real estate market in the area you’ll be buying. You need to know the ins and outs of the market so that you can buy the houses at the best price to get a return. As this website points out, buying low is the only way to have success with house flips, so knowing your stuff really is vital.
What Kind of Property You Should Flip
As well as being affordable, and preferably on sale at auction, a good property for house flippers is a property that is located in a good area where people will actually want to live. It is a house in an area where house prices are rising, and there is good access to education and employment.
The property you buy for flipping should be in good structural condition, so that you only need to make cosmetic adjustments to get it up to standard for sale. If you have to start tearing walls down and getting the place rewired, you are eating into your profits, and you will not see the kind of success you would like.
It’s impossible to say how much any one real estate investment project will cost you because every property and every area is different, but one thing you should bear in mind is that, no matter how much your contractor says the work will cost, it’ll probably cost more and you should have at least a 20 percent buffer above the estimate to ensure the work gets done.
Once the work’s done and the house is looking good, all that remains is to list it with a good Realtor who will be able to sell it quickly. Some flippers choose to sell their properties themselves, which is fine, but if you want to do that, you need to be aware that it could take much longer.