There are 5 important details you must keep in mind before you flip a property.

1. Your profit is determined at the purchase of the home, not at the sale of the home. Many people who flip homes make the purchase, with dreams of the big profits, then they start on the repairs and renovations. Once they finish all the work they come to the horrible realization the money they have invested in the home is equal or exceeds the current market values in the area. Their dreams of profits have evaporated. The problem did not occur at the time of sale, but by not buying properly. You must factor in all the costs you will incur to get the home market ready. Figure in your costs of renovations, costs of ownership while you renovate, and any other expenses you anticipate. A wise investor will then add a five to six thousand dollars to their cost estimates to cover unexpected expenses. Once you have determined your probable cost, you are ready to make a wise purchase. As you can see, the true profit on the house is made at the moment of purchase, not the moment of sale.

2. Getting a house inspection should never be overlooked. A licensed home inspector is going to find potential problems with the home you may have overlooked, and not figured into your offer. Make sure to include in any offer on a property, a clause which gives you the opportunity for a home inspection. Your deal should include 7 days to have the home inspection completed, and the option to walk away from the deal with no penalties if the home fails the inspection. The inspection could turn up problems in wiring, the foundation, or plumbing, which could change the value of the home dramatically. Without a home inspection you leave yourself open to a major loss on any property.

3. Don’t do your own renovations and repairs. Did you just gasp in disbelief? A contractor can do the work faster and less expensively than you. Make sure to figure in the costs of having a contractor do the work. Your job is to get back on the path of finding the next property to invest in. Highly successful investors don’t have time to hammer nails, they have time to hammer out the details of a deal. This is one of the biggest reasons some people make an income in flipping homes, and others become wealthy flipping homes. You only have so many hours in a day, use them where you are really needed, making the deals.

4. Sell your property below other comparable properties. Gasping again? You are an investor, you need to turn the homes over quickly so you can move onto the next deal, and not have your money tied up. By pricing your home one to two percent below other properties in the area, you home is suddenly the most attractive. Your wealth will be determined by how many deals you can turn over, not by making an extra thousand dollars on a single home. When you figure your buying price, plan on selling slightly below the market value, and you will turn homes over quickly, increasing your earning potential.

5. Don’t sell the homes yourself. List the homes with the finest real estate agent available. One more gasp? The cost you pay in the commission fees is just part of doing business. You can be working on buying more homes, while the agent is busy selling. Plus, building relationships with real estate agents is going to pay you back in getting phone calls about homes to buy. They will know you are the man to contact to get a property moving for a distressed seller, and they will make their profits on the other end when you sell. With listings, you’ll also have an army of people to sell your home, plus advertising. Most successful real estate investors know flipping homes is much easier with the help of great real estate agents as their partners.

Using these guidelines will help you increase your profits, and limit your chances of losses when flipping homes. Now it is up to you to get out there and make some deals.

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