5 Things You Should Know Before You Flip A Property

By
Real Estate Agent with Engel & Völkers USA

5 Things You Should Know Before You Flip A Property
by William Bronchick, Esq.

 

1. Money is made at the buy, not the sell of your flip. When flipping a house your money is made at the purchase not at the sell of the house. So, many times people buy a house with the intensions of making a huge profit only to find out that they could not make any money after all the renovations because the purchased price of the house was to high. When you purchase your property you need to be sure that you buy the house with enough money to make renovations, have carrying cost, and add about 5 $6,000. Now, cost is at $147,000, and that is if everything goes as planned. Profit is under 10,000 dollars. The mistake was made at the purchase at the home, not the sell.

2. Get an inspection on the home - Get a complete inspection done on your property. By, spending a few hundred dollars on this expense you can save thousands in problems that you cannot see. 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 its to late. In the contact for the house you need to make sure that you have 7 days to have a 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 I started flipping my brother and me did a house together, and we did all the construction. I had a construction background and figured it would save thousands, but it took us over 4 months to get the work done that a contractor could have had the work done in a month. But, we trying to save money on our flip did all the work on our time off and after work, and it just took to long. On our 2′nd flip we used contractors for almost everything and had the house completely flipped with a new roof, new air conditioning, new hardwood, and much more in only 3 weeks. We did not have to spend all our time working on the property and were able to spend that time looking for the next deal. This is how you get rich in real estate.

4. Place the property for Sale 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, so that you can 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 you are 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. On our second house the market for selling house went down do to the housing market as a whole, and the tightening of the loans across America. We were told that you could not sell a property in this market, but we went ahead anyway and flipped our house. After 3 weeks on the market we had 3 people wanting to buy the house. Why, because we offered it at such a great deal that people wanted to jump on it. That is what you have to do especially if the market is slow.

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 you sign, with a real estate agent you have some one actively marketing you house to get it sold. Once again this will free up more time for you to look for more great deals. If you want to help the process I have found that Craigslist and listing you house in Google Adwords help to, but I use these tools with the help of a agent to make sure I have all my bases covered.

I hope this article has been helpful with the basics needs of flipping a house. If you will study and learn you will make money. But, do your homework before you purchase a house, and make sure that you can pull a profit on your deal. Then, make it happen!

For More information please visit http://www.legalwiz.com

This has been reprinted from Legalwiz Publications/ http://www.legalwiz.com Copyright © 2010 Legalwiz Publications. All Rights Reserved.

 

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5 things you should know before you flip a property

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Rainer
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Nancy Fraser
Exit Realty Premier - Massapequa Park, NY
Realtor, Massapequa Homes for Sale 516-729-0278

David, Excellent post

Feb 22, 2011 04:15 AM #1
Rainer
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Jim Courtney
OklaHomes Realty, Claremore Oklahoma - Claremore, OK
CRS, GRI, AHWD

David, excellent tips. I have shared each of these with my investors many times. I will again show them this summary and say, "See?" Most of my investors want to do the work themselves and actually do the work. The shortest I've been able to get a property back on the market is 45 days. :)

Feb 22, 2011 06:59 AM #2
Rainer
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Tara Lewis
The Horn Company Real Estate Group - Hondo, TX
Medina County TX Real Estate

Excellent info.

Mar 01, 2011 01:17 AM #3
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Rainer
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David Stewart

Slidell Homes - New Orleans Homes
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