Little Known Tips for a Profitable Real Estate Flip!
It’s definitely a buyers market out there! So why not turn house buying into a hobby. You don’t need to be an expert, ask your friends and family to help. With a little cash and some elbow grease you too can have fun and make money too!
We all pass by them on the way to work or while driving through town, those damper looking little properties that once shined on that corner neighborhood lot.
Now, with windows broken, eaves troughs hanging low, they are calling at you every time you drive by saying, “fix me, and make me new again!”
With the sub prime mortgage crisis in full swing, many nice homes needing a little TLC are now being left empty and abandoned. While this is an unfortunate time for many American families, it can bring bling to the pocketbooks of house flippers and investors alike. For little cash and investment you too can buy a home and fix it up, add some charm to the interior and some curbside appeal and reap the profits. Here are some tips for a profitable flip.
Tip#1: Get some Money – First things first, be sure to have either bank pre-approval or fast access to funds before you bid on any property. Don’t bid on more than what you have in your bank account. Many flippers buy the properties and hope to have the home sold before the first mortgage payment is due, which requires a lot of experience, skill and time invested, typically they have crews on call ready to start work immediately, giving them the lead over the do it yourself flipper. Remember bidding and buying real estate it is a legally binding transaction and you will be responsible for all fees incurred and also the balance of the bid you placed. Flipping homes can be a financial risk, you can lose money, there is no guarantee you will make a sharp profit. The secret with flipping is to constantly turn your profit from the last sale into a down payment and investment for the next, until you are above and beyond what you have initially invested, then you are making a true profit.
Tip #2: Ask family and friends for help – The good news you don’t have to be a Realtor or a contractor to enjoy this fun but profitable hobby. Many families work together to flip houses and make it a family affair by involving everyone including friends. Know a friend who is great at laying ceramic tile? Well ask him to help and maybe even he could cut you a good deal on getting the product for wholesale cost. Utilizing friends and family is a key success point in getting the most bang for your buck in a flip.
Tip#3 Utilize Foreclosure listings – There are many ways to find these homes that are owned by the city, banks and government. They are rarely advertised and unless you know someone who works as an underwriter at a bank or mortgage company, you won’t have first dibs on properties. The easiest way is to ask around, it’s a sensitive subject, but if you know of someone who is losing their home, do some research, find out the time line of when the house will go on the auction block, or contact the bank who owns the property and see if you can purchase the property for what’s owed on the mortgage. Usually the bank wants to get the maximum amount on the balance of the loan so they can recoup all costs and attorneys fees. It’s a gamble to sit and wait for the house to go to auction or go to a Realtor, yes the bank is willing to sell for next to nothing to get rid of the property but the house has likely been sitting for a while at this time and there may be more issues in the repair aspect of the homes condition, not to mention the landscape will need lots of TLC.
Check out this free site that offers nationwide foreclosure listings
Tip #3 Real Estate Auctions – When the home goes up for auction, this is a good time to get the lowest price on property. Check your local newspaper or contact the courthouse for the next date and time the local properties will be auctioned at the courthouse. Here is a site of nationwide real estate auctions that list properties going for next to nothing! A great starting point to find the perfect flip!
Tip #4 Making it legal – Ok now you have the property, you stand out in front of it and dream of all the possibilities and also all the dollar signs. Now its time to get to work.
Before you start, make sure you pull out proper permits for your work, check with your local city hall about how to obtain the right ones for the job, then grab the crew and get started!
Tip#5 Hit the discount chain stores – Be sure to check around at discount supply stores and also the clearance isles at the huge home improvement retail stores.
Another tip is to check out the big manufacturer’s warehouses, typically they have a closeout store right there on site, offering huge savings to the general public on products like cabinets and furniture at rock bottom prices! The Merrilat Corporation cabinet store in Adrian Michigan is open every Saturday to offer huge discounts to the public, it isn’t unheard of to have a few hundred people lined up to catch a good deal like solid oak kitchen cabinets for 75% off retail prices or even bathroom vanities for $25.00!
Tip#5 Buy in Quantity – Try buying appliances and landscape items in large quantities. You are more likely to get a deal on buying all of your appliances, carpet and landscape items at the same time and the same place, many retailers offer discounts when you buy multiple appliances in a package.
Tip#6 Create Curb appeal – Landscaping is a crucial element in your flip. If you are really lacking funds at this point, clean up the yard and trim the weeds, try to refurbish the old bushes and trim them up. Go ahead and cut down over grown brush and take down hanging tree branches. Always make sure there is it least a pot of pretty flowers near the front door, or even a hanging basket on the front porch, this adds charm and curb appeal, making the home look warm and inviting, therefore attracting more people to drive by and want to come look inside.
Tip #7 Stage your home – Raising popularity in the flip market is the allowing a professional to come in and stage your property. Many home interior companies specialize in staging. This is where they come into a bare house and add furniture, decor and bedding to make the house pop, giving the wow factor to perspective buyers when they view the property. The good news is when the home sells; they will come in and clear everything away. Staging has proved to increase sales by 60%. You will definitely reap the rewards if use this technique. Try this website to locate a stager in your area.
Tip #8 List your property – All your hard work has finally come down to this and it sounds like its time to finally time to get the home on the market. Now is the time to contact your Realtor. At this time he or she will come out and do a cost analysis on the property and utilize the benefit of multiple listing service, so more people will be able to find your home. Yes Realtors will take a cut of the sale but they can reach a very broad range of interests, therefore increasing the chance that the house will flip quick.
If you are listing the home yourself, it is a good idea to have a home appraisal and inspection, this can also be used as an invaluable tool and you can make sure you list the property at a price that is perfect for the surrounding market. Make sure to do lots of advertising for the open house, highlight the assets of the home and center in on the focal points such as, a huge bay window, two car garage or a large deck and fenced in back yard. Read other listings and get ideas on how to put yours into words.
Tip #9 Create a homey feeling – There’s nothing more appealing than walking into a home and feeling warn and cozy. Make your place feel like someone would want to come in, sit down, kick their shoes off and call it home. Fill the house with sweet aroma, bake some yummy cookies, have a few ready when the open house starts and have a helper in the kitchen baking throughout the day, and keep em comin! Everyone loves the smell of home baked chocolate chip cookies.
Tip #10 Add some fragrance and light candles – The slow flicker of a candle tends to relax people and makes them feel calm and reassured. Making then feel like they are right at home. Also try adding some air fresheners in different rooms. Choose a smell that’s fresh and clean and not perfumy. A subtle smell always attracts buyers into thinking this home is clean and move in ready. Another pretty option is to add a fragrance diffuser. (A jar of essential oils with reeds sticking out that provide a subtle smell.)
You are done. Now sit back and reap the rewards of what you have accomplished. Remember you will get back what you’ve put in! Not only is this a job where you are earning money, it can be fun too!