Part 1 of 3 on How to do a Fix and Flip
Fix And Flip Loans: Tips & Tricks
The interest in house interest is currently at fever pitch as is clearly evidenced by the growing popularity of flipping shows on TV. Unfortunately, the shows lack an aspect of reality. They never tell viewers just how risky and challenging house flipping is and how your profits are determined by several different factors. The following is an in-depth look into house flipping to help you determine whether it’s right for you.
What is House Flipping?
House flipping refers to buying property at discounted rates as a fixer-upper or a foreclosure, fixing it up, and flipping it for a profit. House flippers usually buy distressed properties selling below market rates. Once the property is fixed and brought up to average or above average for the neighborhood, it can be sold at market value thus earning a good profit even when you consider repair and holding costs.
What Steps Are Involved in House Flipping?
The following are the five steps you need to take before you become successful in the business of fixing and flipping houses.
Step 1: Develop a Plan
It is of great importance to have a business plan that defines your goals, budget, infrastructure, accounting, and direction. Proper organizational structuring ensures that your venture is both profitable and successful. You should ideally find partners that have different backgrounds since the differing perspectives will be quite beneficial to the project.
You can always expect to encounter unforeseen issues and challenges but having a good plan in place increases your chances of succeeding particularly in the current market conditions. A house flipper that has a properly structured network that always maintained a disciplined approach is usually the most successful.
Step 2: Find a Team
Surround yourself with the right professionals. This is something important for all successful investors. It is not always possible to properly measure the amount of money and time that you can save if you deal with knowledgeable professionals. Professionals help you maintain schedules and reduce costs by using their networks. Working with a team of professionals makes the flip go more efficiently and smoothly.
You require a good construction contractor to be consulting on the rehabilitation work. You also need a way to be finding homes in need of fixing. House flippers also need title agents and attorneys to facilitate proper transfers of title. You will also need a fix and flip lending contact capable of handling credit issues and pre-qualifications. You also need an accountant to handle and explain the financial aspect of the flip.
To be continued on our Blog Post: Fix and Flip Financing