You are interested in doing some house flipping but you do not know where to start or you are not really sure of what to do. Here are some 1-2-3's of how you can do some house flipping.
1. Know the playing field
Like any other businesses, house flipping is dependent on the market trends. This includes the target customers and what they want or need or what they do not want or need. You, as an interested house flipper should be able to develop a sense of what is marketable and what is not. Of course, this will take time and experience, but you can start out by ruling your OWN opinion of what is a good house buy or not and start seeing marketability in a wider perspective. What you want is definitely not what the market wants.
Once you have determined what to sell, then you should plan on when and how you can buy and sell the house that would give you the profit you intend to get. Here, you should carefully lay out a plan that is time-bound. Make sure that the timetable you make can be realized and that all the things that you need to go through should be included in the timetable.
Another thing that you need to know is the cost of expenses that you need to spend. Do not base your expenses on the least possible amount that you could shed (like paying 10% instead of a 100% for the house that you are planning to buy. This will pose a problem in case you will not be able to stay on schedule with your timetable. Instead, go for the budget that would assure you that when things get off hand in some areas, you won't be paying much in additional, unexpected expenses. Other fees that you should also consider should include the taxes, pre-sale, capital gains, legal and lending fees, among others.
2. Buying
In buying a house, it is not often advisable to go for the most furnished , thus expensive, ones. Though they might be easy to market because of their high-end furnishings, most prospect buyers would almost immediately shun away the moment they see the tag. This will automatically drag the number of your possible buyers down. In considering the price of the house that you intend to buy, what you need to put in mind is that a good buy means that when you buy that house, it will bring you a considerable profit margin.
3. Flipping, per se
When you do the flipping, do not get too carried away with the home furnishing spirit. You are not there to renew the whole house, you are just there to make it livable enough to have it sold. Be reminded of the planning that you did in the very beginning. Remind yourself of the why and how you did the flipping in the first place - the customer who intend to buy the house and the how they want the house to be. Usually, forgetting your pre-flipping plans would lead you to go beyond your budget. So, it is also important that while you remember the âwhat the customer wantsâ, you should also set the money that you intend to spend or the reasonable amount that would not exceed the profit that you envision to get from the flip.
4. Selling
You planned, you bought and you did the flip. Here comes the tricky part - selling and earning something from all the work you did and will be doing. First thing that you need to consider is timing. No matter how saleable your house is if you sell it at the worst time, nobody will still buy it. This is where another part of the âknowing the market trendâ comes in. You have to know when the good time to buy and when is not or you will end up selling the house at a much lower price than you intend it to be sold.
Second thing in the selling part is the marketing. Of course, your house will not do the shouting and announcing that its what people want and it ready for sale! Find a good person/company (if you do not have the knacks for marketing) that knows how to sell your house without sacrificing the price that you have set for it.
Staging is also an important factor in the selling process. This is where the showing off takes place. That means, you have already interested buyers and the only thing that you need is to stage the house enough for them to stay interested even after they have seen the actual property. There are still a lot of chance that, in this stage, interested buyers can still back off. One thing that always works with the staging is simplicity and showing prospect buyers that everything they need is functioning well and in good condition.
Lastly, the pricing. You have already set the price that you intend to sell your house from the very beginning. That is what you actually used as a benchmark for your budget. You may want to review how the market trend is going or discuss things with your Realtor. But no matter what you do, do not go too far from the price that you have set or else your house flipping would end in a flop.
Terry Wygal also known as The Quick House Buyer, has been teaching real estate investors how to wholesale and flip houses for several years now. Terry also teaches real estate investors how put your website on the front page of Google and crush your competition.
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