Imagine this – you come home from work and you see a show where people turn a rundown house around and sell it for five times its value. They probably made more from that one sale than you do all year. What’s more, they had fun doing it! Before you quit your day job just yet, allow real estate guru Jeff Adams give you the low down on flipping houses and his fool proof mantra for success. While it is a great deal of fun, it requires a lot of time, money and effort. Here are the things to look out for if you are looking at flipping a house successfully.
1. Find the Right House
Real estate is a game all about numbers and it is important to get a good deal more than it is to get a good house. When you look for a house, ask yourself if you would buy the property to live in. Is the neighborhood safe for children, are there good schools nearby, is it close to commercial spaces, these are some of the questions that need to be answered. To see how good an area is, drive by it regularly or strike up a conversation with the locals – who knows, they could be your new neighbors!
2. Get your Finances in Order
Bankers and lending houses are a little reluctant to lend to people investing in real estate; and flipping a house takes money. Most of the transactions are made in cash so it doesn’t hurt to have liquid cash. If you are an existing home owner, you could get home equity or a clean line of credit. You could use that money as down payment for the house you are looking to flip, but you will be putting your existing house at risk. Find a financing plan that suits you best, but make sure this is sorted before you decide to invest.
3. Budget Well
Jeff Adams tells you straight off the bat, this project is going to set you back quite a bit. No matter how careful your budgeting is, you are going to overshoot it. This is especially true if you are going to be working with independent contractors; project deadlines are going to get extended. Make sure you are mentally prepared for this and have a corpus at hand so you are not caught with a slew of unexpected expenses. Experts suggest 20 percent over and above your estimated budget to be kept aside, though this is not a hard and fast rule.
4. It is All About the Presentation
When it gets to wooing buyers, the more you go all out, the more results you are likely to get. Before you start showing your house, bake a fresh batch of cookies, have a few potted plants around the house and have a clean front yard. Experts claim that open houses that have the owner’s personal touch are more likely to be snapped up.
5. Think Long Term
It is very natural, especially if you are a first time house flipper to expect instant results. Think about the long run. Assess your property worth and talk to realtors to get a feel of trends in the area. Sometimes, it is more lucrative to put the property up for rent than sell it immediately, though this process may yield results at a much slower rate than an upfront sale.
If you are seriously considering flipping a house, attend a few workshops conducted by Jeff Adams and his team. These will help you understand the nuances of real estate better and help you make informed decisions.
