Flipping properties can be a great source of profit and can even become a hobby for some. “Flipping” a house refers to the purchase of a home or property, renovating and updating it, and selling it for more $$$ than the house was originally purchased for. The renovations that are done after the initial purchase are usually to modernize the home, fix any large issues, or make the home more accessible. With a large project like this you want to make sure your funding is secure! You may want to look into a fix and flip loan from First Equity Funding with rates starting at 7.99%.
Location
Location is highly important when choosing a property. Do as much research as possible on the areas you are interested in buying in. If the area you buy has a high crime rate, has bad school systems, flooding issues, or anything that a buyer would see as a negative, this may not be the best area to invest in. Buying a cheaper property in a better area geographically is more beneficial.
Initial Purchase Price
After choosing what area you’d like to buy in, make sure the property that you purchase is not set at too high of a price point. You want to keep in mind how much you are spending on the house, how much you will have to put into the house when you are flipping, and finally, how much you will be able to sell it for. If you buy too high, you might not make as much profit as you originally planned to. Keeping your profit margin in mind through the entire process is extremely important.
Your Renovation Team
Make sure you have a good team of contractors, interior designers, electricians, and anyone else you need depending on the work you plan on doing on the property. Choosing the wrong people to help out on the house can result in big problems like faulty work and lead to loss of additional money.
New Sale Price
Although you may feel like your home is worth a lot of money after all the hard work you put into it, pricing the home too high is an issue. Potential buyers will turn away immediately if the home is too overpriced. You can either receive offers that are way too low, or receive none at all. Your name can be tarnished for future properties as well and people may not wish to do business with you.
Avoiding these mistakes is highly important for a successful flip. Getting a reliable hard money lender is an extremely important step to this process as well. With First Equity Funding, you’ll get a reliable and trustworthy partner to ensure your investment plans are as successful as possible. Contact us today!
