Have you or are you thinking about buying a home that needs a great deal of work? It sounds pretty simple to buy at a low bargain price and then sell it much higher. When I say low, I mean much lower than those selling in the neighborhood, knowing you can probably resell it for much more, maybe even double what you paid. But be careful!
This flipping business is not what you see on TV programs. I promise it is not as easy as it seems.
You could lose your shirt by not considering these things.
-The amount of work,
-The time needed to invest in the project
-Demolition and dumpsters
- The cost of carrying the money. Maybe you are dealing with hard money, and the rates are exorbitant. Time is not on your side.
-How expensive supplies and labor are.
-Thinking that the resale is going to be a considerable profit.
Can you predict what the market will be like when your flip is ready to sell?
Of course, if you are the contractor and have a crew, you are more knowledgeable about the time and cost of the entire project. You have first-hand experience.
With our strong seller's market, buyers think this is the only way to get into a house at an affordable price. They cannot qualify for more; insufficient funds exist for that move-in-ready home. They may be willing to take that chance.
When looking at a home in disrepair, ensure the floor plan is workable. Is there room for a primary suite without going through another room? Do the major systems need replacing? Do you know the condition of the roof, heating/ air conditioning? Is there a buried oil tank? How is the foundation? How are the sewer lines? Are there signs of water penetration, mold, or wood-destroying insects like termites? Is the basement dry, and have you checked the house in the rain to see how the drainage is handled?
Do you know your limitations? Do you have deep pockets or need to account for each dollar? What advice do you have for someone considering taking on a project and rehabbing a home?
Thinking about buying or selling a home
Call Margaret Rome