Thinking of trying your hand at fixing a fixer-upper? If so, now may be a great time to do it. Mortgage rates are still relatively low, so you’re more likely to get a great loan. This, combined with the low price you can expect to pay for a house that needs work, means you may be able to get a large space in a good location without spending a ton of money. Plus, when you eventually sell, you’re likely to make a significant profit.
Of course, flipping houses isn’t a sure thing. You need to take the right approach to buying, repairing, and selling in order to make the most of the investment. The 2Halls Property Team is proud to offer real estate investors the information they need to thrive in the industry. Here’s a look at a few things to consider before you dive in:
Assess Your Abilities
Remember, when it comes to making money off of flipping houses, it’s not just the cost of the property you need to consider. Any repairs and upgrades you make are certain to cost money and lower your profit margin. The more you can do yourself, however, the less of an impact that work will take on your bottom line. However, be honest with yourself about what should — and shouldn’t — go on your personal to-do list.
There are many home repair projects that should always go to a pro. DIY electric work, for example, can be extremely dangerous in both the short term (shocks or electrocution) and the long term (fire hazards). Plumbing can go wrong in a major way, leaving the property worse than when you started and, in some cases, beyond repair. Even something as seemingly innocuous as gutter cleaning is best left to a pro: Since they have the tools and know-how to do it quickly and safely, the cost — $106 to $167 on average or up to $350 for larger projects — is well worth it, especially if they can add gutter guards to make future work easier and the property more attractive, as well.
Find Your House Hunting Team
When it comes to finding a house to flip, it’s important you have an experienced team on your side, especially at the beginning. For example, you want to make sure you have a real estate agent who knows the area. They can help you figure out which neighborhoods to look in, as well as give you some initial idea of which repairs won’t break your budget.
You’ll also want to find an inspector and contractor you trust to help you evaluate properties after you’ve put in an offer. The contingency period is your chance to bring in experts to help you figure out whether or not you’re willing to move forward with the deal. The right pros can help you avoid committing to a property that needs more work than it’s ever going to be worth.
Plan Your Flipping Lifestyle
Finally, think critically about what house flipping is going to mean to you. Will you plan to live in your property at all, or do you expect to simply fix it and put it back up for sale? If you do expect to live there, do you want to wait until the work is done, or are you willing to live in a house that’s mid-renovation?
These questions are important for several reasons. First and foremost, you need to go in with realistic expectations about what you can — and can’t — handle in a living space. Second, the answers to this will likely impact what kind of funding you can get. Many lenders won’t give a mortgage to someone who only intends to flip a home and never occupy it. If you’re in this boat, you may need to look into hard-money loans in order to get started.
This is far from all you’ll need to know to start flipping homes, but we hope it’s enough to help you figure out if it’s right for you and, if so, help you get started. Turning a fixer-upper into a property someone can call home can be rewarding in more ways than one: These techniques can get your flipping journey off to the right start!
Thinking of getting started? Contact the 2Halls Property Team for expert advice and guidance!