What Does It Take To Do a Real Estate Flip?
Is buying a home to immediately resell at a profit as easy as it looks on TV?
Sounds easy, doesn’t it? You purchase a home at one price, then turn it around and sell it at a profit. Of course, in order to make a profit, you’ll have to pay a price for the home that’s LOWER than what you hope to sell it for. Therein, as they say, lies the rub!
There are plenty of people out there who make a good living from “flipping” properties. But like anything, having knowledge and experience on your side can make the difference.
Here are three things to consider if you’re thinking of getting into flipping properties for a profit.
1. Where’s your money going to come from?
You probably remember those late night infomercials promising quick riches through leveraging equity in property to buy even more property. This is a tricky game, and in many cases, you end up “robbing Peter to pay Paul.” If you’re going to make your first “property for profit” purchase by pulling cash from your current home, it’s best you do your homework first. Yes, getting cash from an equity loan can work, but only if you KNOW you’ll make that money back, PLUS all of your expenses in closing costs, repairs and upgrades, and the cost of marketing and reselling the property you’re flipping. You should also make sure that your timelines are as fast as possible, and that there are no holdups in renovations or the sale of your property. Some have gone broke by making two house payments, with one of those payments saddled with extra debt and no equity.
Also, if you’re going to obtain a mortgage loan, remember that fees or rates may be bumped up a bit because you’re not purchasing the home as a residence.
Finally, if you’re thinking of going the auction route, many of them are “cash only” operations. You’d best be prepared to buy the home you just won then and there!
2. What’s your timeline?
This may be based largely on where you’re getting your money from. Of course, the goal is to purchase, then resell the property as quickly as possible so that you can recoup the expenses of purchasing, as well as make that profit. In this case, time truly IS money. So work out a realistic timeline from start to finish. We can help you achieve this at no cost to you. Contact us for a no obligation consultation.
3. Where will you find your property?
Market conditions may dictate your level of success in flipping a home based on availability and price. In a hot seller’s market, you may not find those bargains. Even fixers can go for top dollar if the demand makes it happen. Getting to know the area you’re looking to purchase can make all the difference in beginning to know what homes are selling for, as well as the potential for inventory that fits your needs. We can help you without costing you a penny!
We are experts in the field of real estate on all levels!
The Elgin and Pilar Walker Team have almost 30 years experience in all walks of real estate, including investments and purchasing for profit! Contact us today for a consultation. Remember, hiring US as your buyer’s agent adds no extra cost to you!