About Flipping Houses
Cable TV channels have special shows that highlight real-estate professionals that flip houses. Investors fix them up, then turn around and sell them for a profit. Today, there are all sorts of people that are taking their hand at flipping houses. With a small cash investment, a good credit line and some elbow grease, anyone can turn a good real-estate profit.
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Obtaining funds
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Before venturing out and placing an offer on a home, one needs to have funding in place first. The best way to finance a home with little to no money down is to obtain a conventional or personal loan that requires a zero down payment as collateral. The best way to obtain this type of financing is to have a good standing reputation with a financial lender. A home or business with over 50 percent equity can also be used as collateral with a new home loan. Having a credit score of over 680 will assure the lowest rate. Once a bridge loan, conventional loan or personal loan is pre-approved from the bank, the search for a fixer upper can begin.
Locating property
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Hiring a real-estate professional to handle the home search is a great way to find property fast and negotiate a good deal. Looking for homes that are bank-owned, foreclosures, abandoned or priced under market value are good starting points. Homes that are in prime locations that will appeal to buyers also need to be considered. Looking for homes that only need curb appeal, minor cosmetic work and tender loving care are the best selections for flipping houses. This assures a small amount of time, money and effort need to be put in before turning a profit.
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Fixing up
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Once the home is purchased and closing has taken place, the next step will be fixing up the property by adding style and flair. The first priority should be to repair the most expensive project first. Examples of this would be plumbing structural issues, roofing and siding. Doing the work alone or hiring contractors who charge the lowest amount on the market is one way to ensure a profitable flip. Only bare essentials and low-cost appliances should be implemented. Staging the home with new furniture and plants is a great way to turn a house and add style flair. When the house sells, the staging company will come and remove the furniture and decor items. Landscaping and a well-manicured lawn is essential in attracting buyers. Colorful annuals alongside a well-manicured lawn will draw a buyer's eye to the front of the home. A new door and door hardware will invite guests in to see what is on the other side. Being careful not to sacrifice curb appeal is very important in getting the home to turn over a profit quickly.
Listing the property
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Once the home has been remodeled, repaired and revamped, it is time to list the property. Hire a real-estate professional who will list the home, hold an open house and work on advertising the property. It is important to list the home for well above what it was bought for, the money invested and around a 3 percent or more profit margin. Closing costs and Realtor fees should also be taken into consideration and figured in with the closing costs.
Making profit
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Having the home sell before the first payment is due and interest is accrued on the loan is what one should strive for. In order to flip the house and move on to the next investment property, there should be enough to pay off the original loan and pay off all debts related to the home. As much profit as possible should be turned over into the next investment. The money that is left over after completing two sales and clearing overhead costs on the third property is considered pure profit.
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Resources
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