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House flipping can be incredibly lucrative, with the average flip nets investors $30,000 in profit, according to The Investor’s Edge. If you’re an adult looking for a way to fund a college education, house flipping could be it. The information below gives you a quick overview of what to expect and consider if you take this route:
Finding the right location
In real estate, location is everything. The better the location, the more in demand it will be, and the higher your potential profit. Some key location considerations to make when you’re searching for a fixer-upper are property values in the neighborhood, the presence of services like schools or entertainment venues nearby, accessibility, and local real estate trends.
Determining if the property will be profitable
In addition to the location, you have to determine if any given property would make you money if flipped. First, check the state of the property. Cooper Design Build points out that you need to check the property’s structure, roof, electrical systems, plumbing, doors and windows, septic systems, mold, mildew, and structural damage. Second, follow the 70 percent rule. Never pay more than 70 percent of the property’s value after repairs are complete.
Considering a mortgage and other finance options
You could potentially apply for a mortgage to purchase a home. However, note that doing so would cut into your profit margin. There are a few other financing options: loans from hard money lenders, wholesaling, house flipping investors, home equity, an option to buy, seller financing, crowdfunding, and live-in flip. It’s always a good idea to run the numbers before choosing an option.
You can make strategic upgrades to attract buyers
Making strategic home improvements can make it more attractive to buyers, and help you turn a bigger profit. The best improvements would depend on the type of home and its location. Outdoor areas like outdoor seating, pagodas, and meditation gardens look good and offer functional value. Indoor additions like high-tech kitchens, basements, livable garages, extra bedrooms, and fancy bathrooms can also work.
Cleaning the home before listing and marketing it
Once you’ve fixed up and upgraded your chosen fixer-upper, you’ll be ready to market it. Don’t forget to clean the home before listing it for buyers. You need it to be spick-and-span to make the best impression. You can save substantially by doing your own cleaning. If you’re vacuuming a laminate floor, keep in mind that a brush roll with hard bristles may scratch or damage the finish of your flooring. Pick an appropriate cleaning device to get the job done right.
Marketing your property with a brochure
By using a brochure to highlight the unique and desirable aspects of your property, you can attract potential buyers and increase your chances of a successful sale. Focus on high-quality photographs, engaging descriptions of key features, and relevant information about the neighborhood.
House flipping takes time and patience
If you’re a newbie, it’s important to understand that house flipping is serious work. While you could be successful even as a rank beginner, you will need to invest a significant amount of resources – including personal time – into getting off the ground. Aceable covers common house flipping mistakes that you should avoid, including not developing your skills, patience, or knowledge.
Working with professionals will ease your burden
You don’t have to house flip alone. You can work with professionals to ease your journey, from start to finish. For instance, an experienced real estate professional could help you pick suitable properties in the right locations.
A contracting crew could help you fix up your chosen property quickly and affordably, while a staging crew could help you present it in the best possible light. When working with contractors for repairs and maintenance, an app can make finding qualified pros a snap. Look for a robust solution that allows you to video chat and schedule projects (check this out for starters).
You could learn while running your business
If your house-flipping business takes off or if you don’t intend to go to school full-time, you could pursue online education. This would allow you to learn while still concentrating on your business. Online degree programs are typically more affordable than in-person learning, too.
House flipping can net you solid returns if you play your cards right. With a couple of successful flips, you could potentially go to any college of your choice. Make sure you plan your house-flipping strategy carefully, run the numbers, and commit to the long haul for the best results. And consider earning an online degree if you want to continue to run your business while studying.
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