If you have found a distressed, ugly house and want to turn it into a marketable showcase, you may want some flipping tips to make this venture a success. Flippers typically find these types of houses at deep discounts and then perform the work it requires to fix them and then sell them for a good profit. If you are considering real estate investing and want to fix and flip a house, consider these key things to get you started.
What to Consider When Real Estate Investing
If you are considering fixing and flipping real estate as a new career or a side gig, you want to do it right so it can be rewarding. The key to beginning this venture is to find the right property and then flip it fast. Before you head out on your search, however, you need to understand what it will take to flip a house. You need a solid plan, along with a reasonable budget to get the job done right.
Once you’ve decided to enter the world of flipping, don’t wait for a good deal to find you. Start by finding wholesalers and other investors through local real estate networking groups and let them know you are ready to buy. When you begin looking at properties, remember it might take looking at more than a hundred to find the one that will work for you.
What to Buy When Real Estate Investing
As a person new to flipping houses, your toughest thing to decide on will be where to get the best deal. You also need to know what to pay for a property that will make it a good deal to flip. One rule that works in this industry is the 70 Percent Rule.
70 Percent Rule– The 70 Percent Rule is commonly used by many real estate investors when they flip houses. This rule is how you determine what price you will pay for a house to flip that will bring you a profit when you sell it. The rule is that you should pay 70 percent of the ARV (after repair value) minus what the repairs will cost you.
The 70 Percent Rule is one way to decide what price to pay for a property that will bring you a profit after fixing. You can also write out all the costs you know it will take to meet your break-even point, add to the cost of the property purchase, and deduct from what you will sell the property for. These numbers should give you an idea of whether the property will be providing you with a profit you are happy with.
How to Finance Your Real Estate Investing
Typically anyone getting into fixing and flipping is not able to pay cash for the first flip. You will more than likely need a lender. Realty Capital Finance delivers quick funding when needed in the real estate business. Realty Capital Finance has an innovative, simple program to allow borrowers to receive loans that standard lending institutions may not consider.
Have a Team When Considering Real Estate Investing
Once you have found your property, secured a loan, and received the keys, it’s time to get to work. Have a solid team ready that includes someone who is experienced in distressed properties. You will need someone on the team who understands foundation and structural damage, and unless you are a contractor, you should consider hiring one before beginning the fixes.
Your team will need someone knowledgeable on local permits and regulations as this can potentially save you thousands of dollars by doing the work right. Many times these projects are going to require inspections by local building inspectors who will check your work on roofing, foundation work, electrical and plumbing, framing, and most other fixes you complete.
Where to Learn More About Real Estate Investing
Realty Capital Finance is ready to help you if considering refinancing, rehab, ground-up development, or purchasing a flip and fix property. Our ‘stated income option’ will make financing quick, simple, and easy for you to obtain a loan. Talk to one of our specialists today and learn how you can begin your journey with real estate investing.