Flipping houses is a rewarding experience, but the real reward is making a profit. As you earn money on your projects, you can use it to buy future inventory and rely less on hard money. When you first start flipping houses, it can be hard to know which properties will yield a good return. As you get more accustomed to doing this, the easier it gets.
Below we share our favorite tips for flipping properties for a profit. These tips work no matter how experienced you are in the fix-and-flip industry!
Pick a Great Location
Location is one of the most important factors to consider. It is essential to find homes in desirable neighborhoods where people want to live. You can fix a home up and make it look great, but you can’t change the neighborhood.
Research local cities and neighborhoods and pay attention to positive signs, such as rising real estate costs, employment growth, and good schools. Be wary of neighborhoods that have a lot of homes for sale, high crime, and high unemployment rates, as it could be on a downswing. Some of the best cities for house flippers are Pennsylvania, Connecticut, New York, and Florida.
Look for Structurally Sound Homes
Ideally, you want a property that needs minor home improvements. Look for structurally sound homes that are free of problems like black mold and cracked foundations. Because fixer uppers are often sold fast at real estate auctions, you may not have time to schedule an inspection. If you’re not sure how to identify potential plumbing, electrical, and structural problems, bring along someone who can.
Choose Homes That Need Quick Fixes
Take careful note of the types of updates the property needs. It’s best to select homes that can be renovated quickly. Remember, most house flippers use hard money to finance their investments. You need to work quickly to update the home, sell it to the new owners, and pay back the loan. Time is money, so look for quick turnaround projects!
Build a Strong Rehab Team
You can’t be a successful house flipper on your own. You need a good rehab team that includes a reputable contractor, property inspector, real estate agent, and hard money lender. A knowledgeable contractor can tell you what repairs need to be made and suggest the right people for the job. They can also stop you from making unnecessary improvements or trying to do too much on your budget.
Flipping houses is an exciting job that never has a dull moment. Just be sure to make smart choices about the properties you invest in, choose homes that are in desirable neighborhoods, and homes that can be updated quickly.