It's hard not to be inspired by the DIY shows depicting weekend warriors who buy a home at a low price and end up with a profit of $80,000 - $100,000. What I can tell you for sure is that those figures are not common. Listen carefully - You most likely will not get rich quick flipping houses. Say that 10 times fast.
For a weekend warrior, what I can tell you is that if you plan, have a formula down and expect to make a nice, respectable profit ($10,000 or so)... you'll be much happier with your results. I believe the key is to have a goal of a couple a year, and expect to turn a smaller profit per flip.
Of course, those folks that have been at flipping for a while successfully and have assembled a crew have already figured out what works. Here's who you need on your team:
Realtor - If you have your Realtor on the lookout, he or she will be able to find you those gems as soon as they hit the market. They can also help you market the property when you're ready to sell!
Mortgage Broker - Have your financing set up ahead of time and know what you can afford. If you're going after foreclosed properties, most financial institutions holding these properties require a pre-qualification letter along with your offer letter. Your mortgage broker will also be able to help you figure out what type of loan you will need.
Inspector - Know what you're getting into before diving in. If it's your first flip, you'll probably want something that only requires cosmetics and you'll want to avoid anything that needs extensive structural work.
Contractor - Even if you plan on doing all the work yourself, ask someone you trust to look at the property for you and tell you if it's realistic. If you don't know a reliable contractor, ask your Realtor.
Electrician - This is where a lot of the expense can come in. Know about the electrical before making an offer. You can end up spending thousands of dollars on electrical. Again, if you don't know one, check with your Realtor.
Plumber - Same deal as electrical. It's crucial to know what you're getting into. You also will want to know if you are connected to city sewage or if you have a septic system.
Educating yourself on the process before entering the world of flipping is important. Savvy investors are also purchasing foreclosures for the purpose of renting for several years, as well.
Contact me for more tips and to see the many properties in Rhode Island waiting for you to remodel!
Bob Black
Realtor
Prudential Gammons Realty
401-942-8844 ext 28
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