House flipping is the art of buying a home, usually at an auction, and reselling it later for a profit. The reason why people engage in house flipping is the amount of returns after a successful flip. However, it is a high-risk investment as you can lose more than you invested. To avoid making loses, there are some tips you can use:
If flipping was easy as buying, then selling at a profit, many people would be real estate billionaires. The first step to success involves making sure you are educated in real estate. For example, you should understand the ins and outs of any real estate market you wish to try. Additionally, you should become an expert on home financing options. Such tips will go a long way in ensuring you do not fail.
Look for a mentor
If you know someone in the business, you should ask them to be your mentor. Give an offer such as a percentage of your first profit as an incentive. This way they will be motivated to tutor you. Furthermore, experts you do not know will be more responsive when there is a financial incentive on the table.
Research foreclosures and listings
There are many websites that offer foreclosure listings, for a fee of course. The most popular include:
Once you have a list of homes you are interested in buying, you can check out their background using BuildFax. The company gives you a comprehensive background check on any home for $39. Extensive details such as additions, remodeling, repairs, and history are provided.
Make an offer
Make an offer once you find a home you like. Great houses selling at low prices will have some competition. There are full-time house flippers who may know about the house and will have made offers. To beat the competition, target a neighborhood and make offers by going door-to-door.
Once you get a home, get to work. Determine the improvements that you can finish on your own, and those that need contractors. Permits will be needed before remodeling starts. Make sure you get the right permits as these can cause fines or delays from city inspectors.
Relist and sell
Relist and sell only after remodeling and improvements are done to your satisfaction. You can do this using a realtor if you do not have access to buyers. Alternatively, you can try the MLS database. They have the skills and network to provide you with the best market price in a quick and efficient manner.
House flipping has great rewards and great risks. If you want to become a house flipper, you need to consider the fact your investment might not sell immediately. You also have to make prudent decisions in the sense that your house might not sell for the price you originally thought it would be sold. If you can handle the ups and downs, are willing to shoulder the losses, and are aware of the risks, it may work for you.