With numerous networks dedicating hours upon hours of weekly airtime to fix-and-flip television shows, fixing up a home and selling it for a profit might look rather easy. However, there’s a lot you don’t see, and a lot that goes on behind the scenes. Here, you can find some advice for making sure that your first fixer-upper investment turns into a resounding success.
Don’t Buy the First Property You See
Getting started with your first fix-and-flip can be incredibly exciting, but don’t let your excitement lead you to make hasty decisions. It’s critical that you choose a property that has the potential to sell not only at a higher price than you pay for it, but at a much higher price. Make sure you’ve had the home inspected and be 100% certain that you have met with a trusted real estate agent for advice. An agent can help you choose the best possible fixes to give the home value. Finally, get at least two contractors to give you estimates on the cost of the fixes advised by the real estate agent.
Find the Right Financing
Financing your first investment property can be a little bit tricky, especially if you go through traditional lenders who aren’t as privy to real estate in your local area. Make sure that you know what kind of loan is going to work best for your unique needs, and then find a lender who specializes in fix-and-flip financing. Not only can you find better rates, but they’ll also be more likely to lend to you even when other financiers say no – especially if they know you’ve gotten your hands on a great deal.
Don’t Stray from Your Rehab Plan
Remember the fixes you and your real estate agent went over – and the ones the contractor quoted you prices for? This should act as a roadmap for you from start to finish. It’s important to keep in mind that sometimes things you didn’t plan for will hinder your progress and there’s little you can do to avoid it, but straying from the original plan is a surefire way to go well over your budget and eat into your profits significantly. Avoid it whenever possible.
Sell the Property for a Decent Profit
Once you have fixed up the home and it’s ready for the market, be sure to call upon the same real estate agent for help selling it. The goal here is to sell the property at the price he or she originally predicted before you purchased it, but things can and do sometimes change during the rehab project, so keep this in mind. Be sure to detail all the changes you’ve made, ensure that any wiring, HVAC, or plumbing is 100% up to code, and even stage the home carefully to make it more appealing to buyers. Leave a little room for negotiation in your asking price, but don’t overprice the home so much that you don’t get any offers.
A fix-and-flip investment is a good way to really get yourself involved in the real estate market, and that’s especially true if you’ll be working on the home yourself throughout the rehab process. There’s a great deal of pride in watching all your hard work and knowledge turn into a serious profit – all while watching someone else finally get their dream home.
