LANGUAGE
FIX N FLIP
Fix and flip real estate involves purchasing a property that needs renovation and has potential, below market value.
HOW DO YOU FIND THE RIGHT HOUSE?
It is a great benefit to have more than one lead generation strategy when searching for houses to flip. Networking is one of several ways investors can go about finding fix and flip deals.
WILL IT BE PROFITABLE?
Know what type of renovations are going to be necessary and carefully estimate costs involved. This exercise should be part of your initial project planning before purchasing.
Your estimated profit is calculated by taking the Project Revenues (otherwise known as the Resale Value) and subtracting all of your Project Expenses.
Profit = Project Revenues - Project Expenses.
COCR = Profit / Cash Invested.
Cash Invested = Upfront Project Costs - Funding Amount.
Have a contingency budget in case of unknown issues that could arise with wiring, plumbing, structural, or need for abatement.
WHAT IS THE 70% RULE IN HOUSE FLIPPING?
When determining the maximum price you should pay for a property you plan on flipping, the 70% Rule of real estate investing dictates that you should pay no more than 70% of the after repair value (ARV), minus repair costs.
WHAT IS YOUR TIMELINE TO COMPLETE RENO?
Completing renovations in a timely manner is key. Your investment is sitting there until you get it sold or “flipped.” As time goes by, your profit could decrease.
GETTING YOUR FLIP SOLD
The estimated resell price should have been set before you purchased the property. Michael will work with you on a pricing strategy that will provide you with the best possible return on your investment.
5 COMMON MISTAKES IN FLIPPING
TV shows makes flipping look so easy, but there it is a lot of work and financial risk if you haven’t done this before. Hiring an experienced agent that can provide guidance and the knowledge to help you become a savvy investor is imperative.
The most common mistakes in flipping houses are:
-
Not enough money to finish the job.
-
Not enough time
-
Not enough skills
-
Not enough knowledge
-
Not enough patience to see it through
These are all bumps in the road you can avoid with having the right agent to work with from beginning to end.
THE BOTTOM LINE
With the right advisor on your side, realizing your financial goals by investing in flipping houses can be the difference from success to financial loss. Contact Patrick O'Malley.
