Flipping Your First Home
By: Preston Langness
So you have been watching a little HGTV and have decided you’re going to give flipping homes a try? Not so fast, there are many mistakes you can make along the way that can burn you in the long run. Make sure you do some research before making an offer on a property. The more research and learning you do before flipping, the better your chances are of making a nice profit.
How To Begin
Researching The Market
You have to know the market in which you’re shopping. If you don’t understand the current market you’re looking in, how will you know if you’re getting a good deal?
Find out which neighborhoods are the good ones. Where do people want to live? Look up the current market trends. Better yet, partner up with an agent. They can help you find a house as well as give you a rundown of the market conditions.
Agents can familiarize you with the ranking of neighborhoods. The highest class of neighborhoods come with the highest prices. The lowest ranking comes with the lowest prices, but may come with more problems. Somewhere in the middle would be a good place to start your flipping journey.
There are other outside factors to be aware of too. Maybe Amazon is building a new distribution center near a specific area, or maybe a new school. These can play huge roles in the process of you selling your home.
Before you can begin flipping you will need to secure the funds to do so. Of course, if you have the cash to be able to purchase the house straight up that would be great, however not many are able to do that.
The bank would prefer to loan you money long term and not take a risk on a flip. Conventional lenders can be a very slow process for securing funds.
Another option is a Cash-out refinance where you take out equity on your current home.
Your best option is through private lending, which is something we offer at www.PrivateLend.net. Private lending is a short term 1-3 year loan with 8%-10% interest. No credit check or bank statements are required as the property is used for collateral. You get your funding much quicker than you would from a bank so you can begin your flip.
You won’t be able to flip the house alone. You will need an inspector, a reliable contractor, sub-contractors and suppliers. Hopefully you are handy and can handle some of the fixes yourself. Saving money where you can is a must when you want to be profitable house flipping. Your real estate agent may be able to help put you in contact with the right people.
Buying The House
Once you have your team and your funds secured you’re ready to shop. Determine your budget for what you can afford and begin searching the market. Your agent will be key during this process. You can also spend time searching the MLS, talking to wholesalers, and even looking for houses up for auction. When you find the perfect house be ready to act fast. You aren’t the only one who wants to flip a house these days. Closing can take some time depending on who you are buying it from.
Having your team ready before the purchase is great so that you can get to work as soon as you close on the property. The goal is to act fast, be profitable and hopefully find another flip shortly thereafter.
Time to see the benefits of your hard work. Once you have completed the project you are ready to put the house on the market. As long as you’re working with a knowledgeable real estate agent, you can be assured they will understand the neighboring market and set the sale at a competitive price.