Flipping homes is both an art, and a science. Use these handy 5 tips to give you the best chance of success.
1. Money is made at the buy, not the sell of a flip: When flipping a house; money is made during the purchase not the sale of the house. So, many times people buy a house with the intentions of making a huge profit only to find out that they could not make any money after all the renovations because the initial purchase price of the house was too high. When you purchase your property you need to be sure that you buy the house with with renovations, carrying costs, sales costs and taxes in mind.
2. Get an inspection on the home: Get a complete inspection done on the potential property. By spending a few hundred dollars you can save thousands in problems that cannot be seen. Foundation, Pest, Wood Rot, Etc... By, getting a full inspection you can rest assured that you know every thing that is wrong with the property before it is too late. In the purchase contract make sure there is sufficient time to have the inspection preformed, and if the inspection finds problems that are going to cost more money that you are willing to spend - you can get out of the contract with no penalties.
3. Don't do the work yourself: Get a contractor or several sub-contractors and have the work done quickly. You need to have you house flipped ASAP, so that you can get it on the market and get it sold. When working alone, with friends or family - even with a construction background the process can take months. By trying to save money on the flip and working evenings and weekends - it just takes too long. However, using good contractors for almost everything it is possible to have the house completely flipped in only weeks. Don't spend all your time working on the property - instead spend that time looking for the next deal.
4. Place the property 1 to 2 percent below market value: If you are wanting to flip real estate and make money the object is to buy and sell the property as quickly as possible and move on to the next house. If you purchase a house and try to sell it at top dollar to make and extra couple of thousand dollars on your flip, and end up holding it for 6 months and loosing money. Get the house on the market at a price that is going to blow the competition away, and you will sell it no matter what the market conditions.
5. Use a real estate agent: Do not try to sell you house on your own. Harness the power of a real estate agent and the power of the MLS system. When you do a FSBO you are depending on people driving by your house and seeing your sign, with a real estate agent you have someone actively marketing you house to get it sold and using their network, connections and experience to make sure you are contractually covered.
I hope this article has helped with the basics of house flipping. Consult a professional and do your homework before you purchase a house - and make sure that you can pull a profit on your deal. Then, make it happen!