Maybe 2021 is the year you’re going to buy a real estate investment property? If you have your sights set on flipping a house for a big profit, you likely know how much work is involved. However, you also know that there are many in the market competing for these sorts of profits. But how can house-flipping newbies compete today? By learning from those with more experience, here are some tips to help you maximize profits.
Stick to your maximum allowable offer:
Experts agree that buying a fix-and-flip investment should not be an emotional decision. There are certain formulas that every house flipper needs to calculate in order to make a profit. “Real estate investing is a numbers business, and if the deal doesn’t make sense when you crunch the numbers, you should be able to walk away,” says Hayden Lyon. In addition, stick to your maximum allowable offer. It’s important to make sure you feel comfortable with the amount you are spending.
Build a buffer into your renovation budget:
Anyone who’s undertaken repairs on their house or an investment property knows things rarely go as planned. Permit delays, bad weather, and unforeseen expenses can all throw a wrench in the works—and revise your bottom line. Plan for unexpected changes in your process.
Don’t always go with the cheapest contractor:
Finding the right contractor can help keep renovation costs in check. But, the right contractor does not always mean the least expensive. “When I was new, I thought in order to keep as much profit margin in the flip as I could, I needed to choose the lowest contractor bid,” says Jonathan Faccone. But, in reality, sometimes going with a more experienced contractor saves time and money in the long run. Plus you get quality work that you can be proud of.
Make sure the contractors have a clear scope of work:
You may be able to head off issues with contractors—including plumbers, electricians, and general contractors—by ensuring they present a clear scope of work for the project, experts advise.
Provide a quality product:
As fast as homes are selling today, the market is filled with many discerning buyers. “Often, the ultimate buyer of a flip expects the home to compare with existing homes—or even new construction—in quality and value,” says Greg Kurzner. Your home can stand out to new buyers with quality finishes and a good plan.
Get your own finances in order before you start:
In addition, several investors pointed out the importance of running your blossoming home-flipping company as a business—because it is. That means tracking all of your expenses so you can make better decisions for greater profits. Be extremely organized, and document every purchase order, utility bill, and closing fee that’s involved in the project.
Expect to put time and money into marketing:
Lastly, it will be important to put the necessary money towards marketing your property. Our team at Corken + Company offers services to ensure that your house is seen by the right people. Remember, we are a group that values “Real Estate Solutions Without Limits”. Reach out to us and we can help you with all your real estate needs!