People dont usually line up at your front door begging you to buy their house for 30-50 percent below market value. Renovation expenses always exceed estimates, and you cant always sell a house for what you think its worth. The impression that many people get when they see the flipping of houses on television, is that it must be fairly simple, because you can usually watch the house be bought, renovated and sold to a customer, all in one thirty minute program. They make it look much simpler than what it really is.
Flipping properties for profit has become a huge trend. In the guide, listed on houseflippingguide. com, we are guided on how to buy and sell houses using tried and tested house flipping techniques. To renovate a house below market price, it is crucial to find an investment property that can be renovated quickly, without major repairs that will slow you down in your house flipping process. Flipping houses for a profit requires time, money and determination while always feeling uncertain about the project. You must keep a good outlook and always try to stay positive.
Ralph Roberts also explains that, You should secure financing before you look at houses and always plan on earning at least 20 percent after your total investment, purchase price, repairs and renovations, real estate agent commissions and holding costs, which include monthly mortgage payments, insurance, property taxes and utilities. Roberts enlightens tells us the importance of working with a top notch real estate agent and how one should carefully choose a limited geographical area to work and then become an expert on the houses and property value in that localized area.
He also warns that Your goal is to bring the property value up to market standards and not to exceed them. What do we need to know about renovating houses? (Kuhn, 2006) Kathleen Austen Kuhn, President and CEO of Housemaster Home Inspections, said (People want to look for a property that may only require cosmetic changes but not substantial structural changes. This especially holds true for newbies. ) She also says that Its not going to be cost effective to excavate a foundation. That would take too much time and money.
She stressed that Buyers should also look for houses where the major elements are in good shape and arent going to require a significant amount of investment. One way of doing that is to get a qualified home inspector to walk through the property so you know what you are getting into and whether there are major underlying issues and problems with the home. Some inexpensive ways to renovate the house are painting, cleaning carpets, replacing outlets and light switch covers, changing the front door hardware and installing new toilet seats.
(Pierce, 2007) Derek Pierce also tells us that Another way to renovate that is relatively inexpensive is to landscape the yard. For updating a kitchen or a bathroom, it is important to find a good contractor. Picking a good contractor and finding out what their specialty is will save time and money. There should be at least 3 different estimates from three companies to get the best price, according to Pierce. In reselling houses for a profit, Pierce says The best way to find investors in the community is to get a loop in of a local real estate investment club.
Ask them what types of residential properties they are looking for. You do have a market of buyers and sellers, there. You must always be sure to have a clear title to the property because your property and renovation estimates have got to be precise, before selling. Dont be afraid to pass on a good deal because there will always be other deals in the market. Its not the deals that you pass on that will break you, its the dumb deals you should have never been involved with. To maximize the return on your investment, in the flip process, planning is very crucial.
Buyers may want to create a schedule and timetable for purchasing and one must stay within that timeline to increase selling potential. With divorce foreclosure rates at an all-time high, there are motivated sellers in a soft real estate market. The key to selling your renovated house is that you have to look for motivated sellers when looking for good deals. It is common knowledge that the longer a house sits, the more it costs to own it. The house only makes money for the flipper, if he sells it and with your proper renovations and a good agent who is highly motivated, the house should sell quickly.
What is an all important step in placing the newly renovated house on the market and actually selling it? Robert Green, author of the book, (Green, 2006) How Your House Can Make You Rich, explains that Theres wealth in your house, lots of it. Your house can be a virtual fountain of riches if you know how to unlock its wealth producing power. We must consider that we have something that everyone needs, and with all the effort and hard work that has been placed in the home, we must keep in mind that we have a valuable asset that is ready to make money for the house flipper.
We have to keep a positive outlook while we go through the process. Derek Pierce explains that he looks to sell a house as quickly as possible, from the day he buys it. The homes price is dictated by the market. Pierce stressed that buyers should avoid overpaying for the houses and also avoid underestimating the cost of the renovations, and buyers can do that by fully knowing all about the buying and selling market.
From the beginning of the process of searching for a house to renovate to the end process of selling the home for a profit, one must take into consideration all the important factors which go into buying, renovating and selling the property.
Green, Robert, 2006, How Your House Can Make You Rich, p. 35 Kuhn, Kathleen, 2006, Home Inspections, housemaster. home inspectors. com Pierce, Derek, You Can House Flip, www. wsoctv/house and home Roberts, Ralph; Kraynak, Joe, 2006, Flip This House For Dummies, For Dummies Publishers, p. 44 Villani, Rick; Davis, Clay; Keller, David, 2006, How To Find, Fix, and Sell Houses For Profit, p. 87