Flipping a house is a real estate strategy that involves purchasing properties for low prices, renovating the homes, and reselling the property at a profit. A number of professionals make a living by flipping homes on a regular basis, sometimes juggling several renovations and sales at any given time. As many have learned, there is an art to learning how to flip a house and still realize a profit. Here are the basic steps involved with the process.
One of the first things that must be in place before you buy a house to flip is determining how you will finance the venture. For people with excellent credit and a background in construction or real estate, it is often possible to secure a credit line from a bank. Others may require more creative means of financing in order to flip a house, such as taking on a partner who is willing to advance the cash required. In any event, it is important to have financing in place before you begin flipping a house.
Within financing in place, the next step is to locate a likely property. There are several characteristics you want to look for when selecting the right house to flip. First, the property must be affordable. The idea is to purchase for the lowest price possible. Consider homes that have been on the market for some time; the owners may be willing to accept a lower offer simply because they are tired of waiting for a sale.
Second, the property must be salvageable. One of the basics of learning how to flip a house is to only deal with properties that are basically sound. The foundation must be in good shape and no more than minimal upgrades to the wiring and plumbing should be required. It is a good idea if the roof is basically sound as well. Any other issues are more along the lines of cosmetic renovations and can usually be accomplished without spending a lot of money.
The next consideration when you want to flip a house is the location of the property. If you can find a run down home in an up-and-coming neighborhood, there is a good chance you can earn a hefty profit once the house is renovated. Because you want to earn enough to cover the cost to flip a house and make enough money to make the task worth your while, it is important to make sure the neighborhood is stable and is likely to attract a number of buyers.
Along with location, you also want to make sure you can renovate the property and sell it at a price that is within a reasonable range for a typical family. This will increase your chances for a quick sale, since more prospective homeowners will consider the property to be within their means.
Before buying any property, make sure you thoroughly understand any and all applicable zoning laws and restriction on construction that may apply. Know in advance what type of building permits you will need in order to bring the old house back to life again. This is important, as you will want to calculate any costs associated with complying with local laws into your final sale price.
Once you have the property in hand, begin the renovation. This will usually include elements such as replacing carpeting, painting, updating the kitchen, and possibly adding or moving existing windows and doors. There is also a good chance you will need to do some landscaping in order to make the property more attractive.
When the home is ready, stage the house and have your first open house. Staging a home with a few pieces of furniture in each room help potential buyers to get an idea of how they can use the room themselves. Keeping the amount of furniture to a minimum also makes it possible for buyers to note any attractive architectural details found in the rooms, such as decorative molding, chair rails, or hardwood floors. Staging can usually be done with a minimum amount of expense, but can greatly increase your chances of securing your asking price.
Most experts set a the goal to flip a house within ninety days after the initial purchase. This often means keeping to a strict renovation schedule so the home is ready for viewing as soon as possible. By choosing the right home, making it fresh and attractive, and staging the home properly, there is a good chance of meeting your goal and making a decent profit.
