Some people flip houses for a living, making good profits out of the endeavour. If you are interested in getting in to house flipping, have a look at the following tips.
Don’t bite off more than you can chew – for your first project, look for a smaller property which does not need extensive renovation. Non-invasive upgrades such as painting, tiling, bathroom & kitchen upgrades, landscaping and so on can add huge value and contribute to a quick turnaround. Starting small is less risk. Time is money, so the faster the turnaround the quicker the return on investment. Stay away from structural changes and stick to existing layouts in the kitchen and bathrooms to keep costs down.
Don’t pay more for the property than you absolutely have to. The key to this is good research. Look for a project that will offer good potential capital growth. Thorough research will enable you to spot a great deal at the right price and act quickly. Remember that some sellers are prepared to take a lower offer for a fast, fuss-free sale.
So - once you have your first project identified, at the right price, negotiate the longest settlement period that you can. A 90 day settlement will give you time to complete your planning and design, and organise your renovations well before the start date.
As far as design is concerned – don’t fall into the trap of improving the home to your own requirements. Keep your target market in mind, and stick to upgrades that will have general appeal for this target market. Keep abreast of current trends in decorating – from styles to colours, and try to keep your new designs mainstream. Another aspect of this is to avoid over-improving, as you may land up having over-capitalised and unable to recoup your investment or make anticipated profit.
Key to maximising your profit potential is to buy materials wisely. Negotiate with suppliers, and ask for trade discounts when buying supplies. Keep an eye out for sales and make the most of connections who can offer you wholesale prices.
When you are done – consider using the services of a home stager, or style the home yourself so that it looks as attractive as possible, for a fast sale and a premium price.