Buying an undervalued house that needs work, fixing it up, then selling it at a profit can be a great way to make money. But for every flip that ends in fortune, there are plenty that end in failure. Here’s some advice to help you avoid losing money.
- Make sure you can afford to do this. Buying and selling property is expensive. The most straightforward solution is to pay for the house you plan to flip in cash. But even then, there are more costs than the renovations. You have property taxes, utilities, and capital gains to consider. Remember, the only way to make money is to sell the property for more than what you paid PLUS all these additional costs.
- Know what you’re getting into. Study the market so you recognize a good deal when you see it. Consult with local real estate professionals to find a property and neighborhood that has renovation potential. Know which renovations are worthwhile and which aren’t. Understand what price the completed property will be worth. Prepare a detailed budget and stick to it.
- Bring renovation skills to the table. Flipping properties takes a lot of time and many technical skills. If you have to pay tradespeople to do the work for you, there’s little chance you’ll make a profit.
- Be patient. Wait until exactly the right property comes along, take the time to research it fully, do quality improvements, then put it on the market and wait until a buyer meets your price.
If you’d like to be connected with a local real estate professional who can help you get started flipping properties, give us a call today.
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