Flipping Houses - Three Important Rules
You want to make money flipping houses. You also want to do
that without taking any big losses. Here are three important
guidelines for flipping those properties profitably without taking
too much risk.
1. Know the Value
The most important thing is to know what the house will be
worth when you are finished and have it for sale. This is not
an exact science, but those who can estimate most accurately
will make the most money with the least risk. After all, it doesn't
matter how cheap you get the property if you then spend too much
for repairs and other costs, and you'll only know how much is
too much if you have a clear idea what the final sales price
is likely to be.
With that figure in mind (and get help if this is difficult
for you), you can safely determine whether there is a decent
profit. You just work backwards, deducting all projected costs
as well as the profit you want. This determines what you can
safely offer for the house.
2. Have a Plan
I have seen people buy fixer uppers with no idea what they
were going to do with them. They just thought the price was right
based on some gut feeling. One
man I know has been sitting on just such a project for over five
years now. He loses money every month. When you look at a house,
decide what you can do to make it saleable, and then determine
the cost of doing those things. then refer back to number one
on this list.
3. Have a Back-Up Plan
If you really want to be safe you need to have contingency
plans. What if the market softens while you're working on the
house? Can you rent it out until times get better? What if you
can't get the loan you planned on for repairs? Can you find enough
money to do a cheaper faster fix-up so you can sell the property
before holding costs eat up the profit? Plan well, but also plan
for the problems you might have when flipping houses.
Tips For Flipping A House | Flipping
Houses - Three Important Rules |
