Tips When Flipping a House

You’ve heard me talk about flipping houses off and on over the years. It’s something I would like to blog more about in the new year. My family has been flipping houses since 2012. Prior to that, we had spent a lot of time researching and learning about the house flipping process. It took a lot of faith and determination to flip that first house. It was a scary thing to throw a lot of money at something, not knowing how it would turn out. It is definitely an investment, and something that needs to be done correctly, or you can lose a lot.

With that being said, and now that we are real estate agents, I thought I would take some time to share some things we have learned over the years when buying, fixing up, and selling houses.

Tips When Flipping a House

1.) Know your market– You need to know if the current market is a buyer’s market or a seller’s market. If it’s a buyers market, that is great for you when you purchase your property, however, it isn’t going to be great when you go to sell your property. You can ask a real estate agent to give you a CMA (Comparable Market Analysis) so that you can better understand what is going on with the houses in the area you are buying in. If the trend shows that homes are selling for a lot less than normal, you might consider holding off before investing in that area.

2.) Think about resale– Sometimes a good deal pops up and you want to snatch up a property that might not be ideal for future homeowners. You don’t want to hold onto the property any longer than you have to, so think about what a new homeowner might want in the property. Does that property have enough bedrooms and bathrooms? Is the kitchen and living area spacious enough for the home? These are all important things to think about.

3.) Research the neighborhood– You will want to research the neighborhood that the home you are thinking about purchasing is located in. Is this a desirable neighborhood? Does the home fit in with the other houses in the neighborhood? Is it a safe neighborhood? These are all things that future buyers are going to be considering when purchasing a home, so you should also consider these things as well.

4.) What updates are needed?– Now, many people think that when you flip a house you can go in and paint, slap some new flooring down and you are good to go. This isn’t always the case. Actually, most of the time, there is a lot more work that will need to be accomplished in order to get the home up to market value. Consider the kitchen and bathrooms as one of the most important updates that will need to be made. You don’t always have to do a complete gut job, but make sure that they are appealing and up to date. One way to update kitchens and bathrooms without completely ripping all of the cabinets and stuff out is to paint, put new flooring and lighting in (if needed), put new handles on the cabinets, and add a new backsplash and countertop.

5.) Funds– Do you have the funds to continue to make the mortgage payments on the home while doing the updates and then while waiting for a buyer to come along to purchase the home? Many times we budget for the updates of a home, but forget about the holding costs. You will want to make sure that you have all bases covered. It can eat into your profit when you have to hold the home for some time before it sells, however you just never know how long a home will sit on the market before it sells, so it is good to budget for all of these things.

There are a lot of things to consider when buying and selling houses. While it can be a very lucrative business, it can also be stressful. Make sure you do your research before jumping in.

We hope you enjoyed these Tips When Flipping a House.