How to Succeed in the Fix and Flip Industry
Fixing and Flipping Real Estate: Points to Ponder
Ads on television make fixing and flipping look easy. You buy a cheap house, sell it for a profit and boom, you make money. But is it? An article in Money.USNews.com doesn’t think so.
Mindy Jenson says the competition is stiff because you’re competition is retail buyers and they don’t care how bad a place looks.
Real estate buyers and investors know property. Their job is to access a house for resale. They know what repairs and maintenance a house will need before it is sold, they also know contractors who are honest and reliable, how long it will take to get the job done, and how much it will cost. They are aware of costs that aren’t so obvious such as insurance and taxes. They know the market, because it is their job.
Does that mean you shouldn’t jump into the game of Fixing and Flipping? Of course not. It means that you should go into it knowing as much as possible, just like you would any game or deal that will cost you money to make money.
Areas to consider:
-First on the list is to know your limit and stick to a budget. Look for houses that have been on the market for more than a couple of months. Know the market value by comparing properties in the neighborhood.
-Know where you will get the money to buy, and establish an relationship with the lender, know how long it will take, sellers fees, real estate person’s fees, time involved, closing costs, and other costs that are not so apparent, such as taxes and even HOA costs if they apply.
-Know the market: There are good and bad markets. Some house are sold within a few days, while others stay around for months.
If you have done your homework, watched the market, and have your financing in order, perhaps you are ready to make an offer.