How To Get Started In The House Flipping Business
In the past, house flipping helped many investors earn a great deal of cash. According to CNBC, house flipping is still extremely profitable, although it can also be risky if you aren’t careful.
If you are thinking about starting a house flipping business, here are a few things you should know.
Assess Yourself and What it Take to Make it in the House Flipping Business
To reduce your risk, determine if you are cut out for the house flipping business. In order to thrive, you and your partners must have the temperament to succeed and must understand the home flipping laws of your city, county, and state. You must also be sure you can make a profit in the area where you plan to do business as a house flipper.
Obtain Pre-Approval Ahead of Time
Make sure to get preapproved by a lender before you start looking for properties. That way you will know how much you can spend on a property. In addition, before signing on with a lender, ask questions and make sure they can meet your financial needs and goals. For example, if you don’t have a lot of cash but do have a good income, ask potential lenders if they can provide loans with financing for 100% of the purchase price and remodel. Or, if you do have enough cash for a down payment, find out if the lender offers loans for 80% of the purchase price and 100% of the remodel.
Build a Strong Team
Most house flipping teams include a real estate agent that understands REO, contractors, and a lender. To ensure smooth transactions, make sure you have completely researched each team member. Be sure to ask for references, cost estimates, and delivery dates or time frames.
Find Properties With Profit Potential
There are many ways to find a good property. You can find them through your Realtor, online, driving down the street, or at professional real estate meetings. It doesn’t matter how you find a home, as long you find a home that can turn a profit after you have remodeled it.
Examine the Profit Margin
Before investing in a house flipping property, you must determine if you can make a profit. To do so, you will need to estimate its remodeled value before you buy it. You can do this by having your Realtor perform a Comparative Market Analysis that includes the prices of three similar sold homes in the area. In the end, you will need to study the difference between the purchase price and rehab expenses with the final selling price.
To find out more about how to finance your first fix & flip, contact Infinity Commercial Lending. Our experts look forward to helping you reach all of your financial goals.