Flipping a house is an extremely involved process but can also become an extremely profitable process. Flipping a house involves three well defined areas in order to find true success. These are the purchase process, remodeling and selling. If a person is not knowledgeable in all three areas, problems could be lerking around the corner.
Things You Will NeedYou will need knowledge of the housing market in your particular area of interest. A knowledge of the construction business and financing institutions would also be helpful.
Purchasing the house that you intend to flip can be the most important step in the entire process. While a house can be purchased using any number of methods, such as at an auction, a bank foreclosure, a tax sale or even from a desperate homeowner, the end result should be the same.
Your interest should always be to purchase a property, in an area, which will make a profit. Never fall in love with the house, but always fall in love with the deal. If the price you pay for the property is too high, you will have a problem selling for your asking price later on. If you purchase a property in a questionable neighborhood you may have problems during the selling process later on.
Learn the market in your area of interest. Learn the actual value of homes in your area of interest. Have some idea of the price that you can sell for and then negotiate, negotiate and negotiate. Pay as little in closing costs as possible. Closing costs should be added to the purchase price and are many times a hidden fee.
Before you agree to terms and sign a contract understand the profit possibilities. Keep in mind that any repair estimates, which you have compiled, will normally be lower than expected and your remodel expense will normally exceed your estimates. The question should be, is there enough room between my purchase price and my possible selling price for me to realize a profit? Take into account, before you purchase a property, the large ticket items which you must replace during your remodeling process. Items such as air conditioning units or a new roof. Take time with this question and be honest with yourself.
Remodeling your flip house can be a tedious process. The things you should know during this process is how much you will be able to spend. Understand that you may not have enough money to perform every remodeling idea which you dreamed of. Many times, necessity will dictate what you can or cannot do during this process.
However, there are many things which you may be able to control. For instance, many air conditioning companies will replace on old unit with a new unit for a customer. The company may be able to refurbish the old unit and sell it at a reduced price. This could save you thousands.
Many times you can hire a local handyman to replace a roof for a fraction of the price that a roofing company will charge.
Do not over indulge during this process. Your goal is to make a profit and you must create ways to save money. Think outside the box while saving money, but at the same time create a great product for your potential buyer.
Selling your house for a profit can sometimes be a problem. I do not recommend that you use a realtor. That will cost you 6% of the sale and you may not be able to afford that luxury. I suggest that you sell your house yourself.
You must be flexible during the selling process. Many times, holding out for top dollar can not only cost you thousands, but at times it can cost you the sale. Here are a few tips.
Before you list your finished flip house make lists. Make a flyer of your property and list things such as the size and age of the, air conditioning unit and the furnace, the age of the roof, the kitchen appliances and so on. List every advantage which your house has, such as a fenced back yard, two car garage, sprinkler system, reverse osmosis system, security system. Potential buyers love this type of due diligence.
If you have the ability to put a photo of your house, in the flyer, that is a plus. If you do not, find someone who does. Print the address, school system and if the house is close to the fire dept., the police dept., or shopping.
Call the newspaper and place a small classified ad for the sale of your house. Keep it simple. Only the words, "Open House", the address and the times at which you will conduct the open house.
Purchase open house signs. These should be large signs, approximately 24 inches by 30 inches. Purchase signs with an arrow on them and write, in very bold letters, the address of your property on each side of them.
The night before your open house, go to popular hotels and ask the management if you can leave a few of your flyers on their counters. Some will say okay and others will not. Another great place to leave your flyers is at restaurants or banks. Any place where you may find a potential buyer is a great place to leave a flyer.
On open house day, check your property one last time and make sure everything is perfect. Cut and edge your grass. Trim the bushes and trees.
Once your house is perfect, put your open house signs on street corners. Direct traffic from every busy street possible and also have a sign in your front yard.
If you have done your job correctly, a buyer will be at your house before you know it. Here is one thing to remember. If you list your house with a realtor, your house could be listed for up to six months. You must be aware of that while selling your house yourself. Be patient and persistent. Replenish your flyers each day, keep your attitude positive and never give upAs you can see, flipping a house is an extremely complex process. Many have tried it, but few have found real success doing it.
Tips & Warnings
Know the real estate market in your area of interest and do not over pay for a house. You should be looking for a great deal but if you are not knowledgable, about your area of interest, you will not know what a great deal is.