House flipping tips
I wrote a guide, house flipping for dummies, yesterday, but I want to get more in depth about the intricacies of house flipping. Here are a few tips.
It is important to remember that at least 50% or more of your success with your house flip will be determined by how the real estate market is doing in the area that you are flipping your house in. From 2004-2007 a complete idiot could make a nice sum of money by flipping houses because the real estate market was on fire, the last few years even professionals have had troubles breaking even.
The real estate market is beginning to turn around but it all depends on where you are. Some markets are doing better than others.
It is very important that you buy the right house at the right price. You should not pay a dime more than you should have to for the house.
It is also equally important to have a plan and budget and to stick to it. A general rule of thumb is to spend 6-8 weeks on the flip and invest 10-15% of the house’s worth into the flip. The longer you hold on to the home the less chance you have of having a profitable flip. Time is money.
You need to determine a couple of important things beforehand. Are you going to hire a contractor or are you going to try to be the ringleader yourself? Are you going to hire a real estate agent to help you sell the flipped house when you are done or are you going to try to market the house yourself?
Margins are so low when it comes to house flipping to where you do not have much room to hire real estate agents. You do not want to give away 5% of a 200 thousand dollar home. That is 10 thousand dollars!
Those are just a few tips but they should come in handy!