It’s easy to see why you’d be interested in undertaking a house flip. After all, countless individuals have generated considerable profits through flipping homes over the last decade, and it’s only natural that others would want to get in on the action. However, undertaking your first flip without putting in the prep work stands to empty out your finances and ratchet up your stress levels. So, if you’ll soon be having your first go at house flipping, make sure to attend to the following preparations.
Work with a Certified Home Inspector
Under no circumstances should you invest in a potential flip without first having it professionally inspected. While a personal walkthrough of property may reveal certain issues, there are some problems that can only be spotted by certified home inspectors. So, no matter how good a deal you appear to be getting on a home, make a point of calling in a seasoned home inspector before proceeding to put down an offer.
By compiling a detailed summary of the issues they encounter, a home inspector will provide you with all the pertinent knowledge you need to make an informed buying decision. Depending on what the inspection reveals, you may ultimately decide against purchasing a certain home and choose to shift your attention to other potential flips. Furthermore, a professional inspection may even serve to strengthen your hand at the bargaining table. Should the inspection reveal problems with the property that the seller never made you aware of (and was possibly unaware of themselves), you’re likely to find yourself in a good position to request a decrease in the asking price.
Research Local Home Values
If you’ve ever wondered by so many real estate professionals emphasize location over everything else, your first house flip is liable to show you the answer. Unsurprisingly, homes that are located in areas with high demand for housing, strong growth rates and robust local economies tend to fetch much higher prices than homes found in areas with waning demand, slow growth and struggling economies.
So, before putting any of your hard-earned money into a potential flip, take care to research home values in the area. If the property is located in an area that falls into the latter category, it may not be worth your time and money, as you’re unlikely to see a robust return on your investment.
Determine the Overall Cost of the Flip
No house flipper wants to spend exorbitant sums of money repairing and/or renovating a home they don’t stand to make a profit off of. So, after you’ve received a detailed rundown of necessary repairs and renovations from a home inspector, obtain estimates from various contractors, as this will provide you with a good idea of what you can expect to spend fixing the place up. Needless to say, if the overall cost of repairs is a greater sum than you stand to sell the house for, it may be time to start considering other properties. When compiling your flipping a house checklist, make sure to devote special attention to this particular step.
Find the Right Contractors
Good contractors are crucial to the success of any house flip. Of course, as anyone who has experience with home renovations can tell you, not all contractors are equally obliging. While some contractors are vigilant about completing jobs in a professional and timely manner, others have no qualms about walking away from jobs with which they’ve become frustrated. This is why it’s important to read online feedback for any contractor you’re thinking about giving your business to. Look online and find as many reviews as you can for the company you want to go with. Word of mouth is the best way to find a contractor because then you know they will get the job done right, at the right price.
You should also avoid working with contractors who are unlicensed. Even if you find their comparatively inexpensive prices tempting, hiring an unlicensed contractor is liable to result in considerable regret. Not only are you liable to find yourself paying their medical bills if they get hurt while in your employ, you may also enter the property one day to discover they’ve simply abandoned the job without providing ample notice. Make sure to do you research and not skip this very important step when hiring a contractor.
Because of the many reality shows dedicated to chronicling successful house flips, some of us have come to believe that flipping homes is much easier than it is. So, if your firsthand knowledge of home repairs, resetting of thermostats, renovations or the local real estate market is lacking, you’d be wise to do your homework before investing in your first flip. No matter how much you stand to make, you stand to lose even more if you fail to go about the flipping process in the wrong manner.
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