So, as most of us know, house prices are rising and the inventory is low. Today we have a buyer’s market in most areas because there are a lot of buyers, but not many people selling. However, interest rates have been on the rise and this affects everything in the marketplace. With all of these variables combined, real estate investing and house flipping itself is getting harder to do. If you educate yourself properly, you could make a lot of money and create a great life for yourself or your family. If you’re wise and stick to a formula, you can get a high return even in an upside-down market. Today I’m going to discuss some tips to help you turn a profit in the house flipping business.
- No matter what, ALWAYS stick to your numbers! By now you should know what ARV means. If not, it stands for “After Repair Value” of the property you just invested in. Your total investment for buying and flipping should never be more that 70% of its ARV. ALWAYS stick to this rule of thumb.
- Be sure to know your market like the back of your hand. Each area is different and this is extremely important to know if you want to be successful. Do your homework on comps and see what the average days on market is for a property like yours. Knowing your market will help you decide whether to sell or hold the property and rent it out.
- Put on your buyer’s cap when deciding what to do for remodeling. You must rehab your house for the people who would enjoy living there. It doesn’t’ matter what you may like, it matters what they may like. So, put yourself in their shoes when figuring out remodeling ideas.
- Show off your flip, you should be proud. Be sure to note everything that was replaced or added on. If you replaced windows, the roof, structural issues, etc. let people know because this will create peace of mind for your potential buyers.
- Don’t ever let yourself get greedy and don’t overprice your home. If you overprice your home, it’s not going to sell and then you are going to end up holding onto it. Every neighborhood has an average price point and you should stay within it if you want your property to sell. Sell it for what it’s worth and you’re going to make a great house flipper!