Fix and Flips Investing Guide
Several ICDAR members have become experts at house flipping, and we want to share some of our insights with you. House flipping sounds easy in theory, but it’s actually difficult in practice.
Our job is to teach you how house flipping works. Not only do we want to help you understand how house flipping works, but we also want to share several tips and tricks that will help you make a lot of money in a short amount of time.
House Flipping – How Does It Work?
House flipping is a fairly simple process. First, you buy a house well below its market value.
Next, you fix it to the point that its market value is significantly higher than before. And finally, you sell it at a much higher price than when you first bought it.
Sounds easy enough, but there’s more to house flipping than just buying an old house and repairing it. You will also need a team, a budget and a timetable.
You will also need to learn how to choose the right property, or you could end purchasing a house that you can’t sell at all. So when you’re ready to flip your first house, you will need to consider the following factors:
Location – In most cases, a property’s location is more important than its current condition.
Even an old property is valuable if it’s located near good schools, commercial centers, recreational areas and transport hubs. In such a situation, only the property is the problem, and it can be fixed with a few repairs and renovations.
So above everything else, always look at the property’s location. Ideal candidates are usually poor or damaged homes in developing or well-developed areas, so choose wisely.
Specific Problems or Flaws – You’ll want a property that has a specific problem or flaw.
For example, no one wants to buy a house that has a broken plumbing or sewage system, which is why such homes tend to have low prices in the real estate market.
But what if you could repair those damage systems? Suddenly, that low-value property regains most of its original value, and you can sell it for a substantial amount of profit.
Properties that have one or two problems are also easier to fix. For example, if a particular house has a damaged kitchen, but the rest is relatively safe and intact then you will only need to renovate the kitchen area. The rest of the property will require little or no work at all.
Age – As a general rule, newer houses are easier to flip than older homes. Not only are they in better conditions, they also require fewer renovations.
In contrast, old homes will almost have something wrong it. Some have leaking roofs, while others are depreciated to the point that they will require major renovations.
So if you want to become a house flipper, be sure to choose a property that has the right age.
House Flipping Tips and Tricks
If you’re are ready to start flipping houses, we can provide you with several useful tips and ideas. Here are the best ones we have.
Create A Timetable – Experienced house flippers can buy, refurbish and flip a house in only 3 months or 90 days. In some cases, the process can last for half a year to around 9 months. If your timetable exceeds this period then you’re in trouble, as you’ll probably need to lower the price of your properties in order to sell them.
A good timetable usually lasts between 4 to 6 months, sometimes more if the property requires a lot of work. So tell your team about your time table and make sure that everything goes according to schedule.
Create A Team – You will need to have a team to help you flip houses. You will need repair contractors, marketing experts, brokers, researchers and assistants to help you get the job done.
Additionally, you may need to hire additional people if the property you bought has certain problems. For example, if the house has a mold infestation then you will need mold remediation experts, and if it has multiple leaking pipes then you will need to hire an experienced plumber.
Furthermore, your team will also need to coordinate with each other if you want them to finish on schedule. Remember that you only have a limited amount of time to fix and flip the property. So your team will need to work together if they are to finish their work on time.
Prepare the Necessary Funds – Do not purchase a property unless you have all the necessary funds to flip it. Usually, the cost of rehabilitating a house is around 10% to 20% of its original price or market value.
For example. Let’s say that you want to flip a $1000,000 property. You will need around $100,000 to $200,000 to renovate it. That’s a lot of money, but if you do your job well, you will be able to flip the house for $1,500,000 or even more.
Market Your Finished Work – Finally, you will need to promote your properties. If you and your team have done a good job on the houses then you will attract plenty of buyers in no time.
You can also find plenty of sites that act as platforms for house flippers. Just Google your area and add ‘flipped houses for sale,’ and you will be provided with all kinds of sites where you can promote your property.
And if you prefer a more local approach, try to befriend a local realtor with a great track record. Tell him that you are willing to work with him on an exclusive basis if he can provide you with good results.
And that’s basically how you fix and flip a house. It requires a lot of planning and resources, but if you do it right, you could end up making hundreds of thousands of dollars in only a few months. So give it a try and good luck.