I’m usually talking about building houses like the one above that we currently live in, but we also have some experience remodeling and flipping houses. We mostly have stuck to building custom homes because in some respect it’s a little easier. One of the biggest challenges when flipping a house is making sure to not sink too much money into the home itself. When doing a custom home you have a little more flexibility on the spending.
I thought it would be informative for me to share some of our knowledge about how we were successful in gaining a profit on our flip homes. That is the ultimate goal, right? We always went in with the thinking of how do we make this house most appealing with the least amount of money.
Location is the Key
One of the most important things in flipping a house is choosing the best location. You want to make sure you are in a neighborhood where people want to live. Do your research and see if the homes in the area go quickly. This will be a great factor in knowing if its popular among buyers.
Making sure the home is around a good school system is extremely important because more times than not the buyers will either have children or plan on having children in the future. Also, being around a good school system normally means less crime.
Sometimes you will need to pay a little more for a particular location, but this ins’t a bad thing. Paying a little more upfront may mean more money in the long run. If you do your research and buy in an area that is a little more pricey, the home will potentially sell for more and of course appraise up to whats around it.
Inspect the Property and Estimate Your Cost Upfront
Having an inspection is a must have before buying a flip house. This will allow you to see upfront problems that otherwise may not be seen. You may find out the house is a money pit and isn’t the right one for you. Or it could be a jewel and only need cosmetic updates which is the best kind of flip in our opinion.
Although, in most cases you will have some major repairs along with cosmetic. Knowing most of the problems upfront will make it much easier to do a budget and estimate your project cost. This is very important because you want to make sure you are making a decent profit.
Know and Choose the Updates Carefully
You probably have a good idea of what you are going to do with the property even before you buy it, but no matter what, choose your updates carefully.
The most important thing is to consider is what updates will give the most drastic change cosmetically without spending a fortune. Hint, hint, a great one is painting the brick! Didn’t you know I would mention that.
And another one is the kitchen. Everybody wants a beautify and awesome kitchen. This one place where you will get the most bang for your buck.
Catherine & Bryan Williamson of Beginning in the Middle know what they are doing when it comes to renovating properties. Check out this kitchen before and after of a property they are currently working on.
DIY as Much as Possible
DIYing as many things as you can on the flip will be another great way to make more of a profit – especially things such as painting or any simple projects you already have experience with.
Another thing you could do yourself would be the demoing. If you don’t mind a little hard work this is for sure one everyone should be able to do. I mean who can’t rip up carpet and tear some sinks out, right? It would be a great way to destress!
Be Your Own Realtor
Doing for sale by owner definitely has it perks and the biggest one is putting more money in your pocket. It also allows you to show your home only when its convenient for you. This means no unexpected guests when you are in the middle of cleaning it up or painting.
If you choose the right location, being your own realtor will actually be pretty easy, the house will pretty much sell itself. Also, if the house is very visible during the remodeling process, people will be intrigued and want to see it. It will also be the talk of the street, which means more lookers for you.
With a potential flip house, making a low offer is a good idea most of the time. I would hate to look back and think I could have gotten a house cheaper. I mean, if you don’t try, you will never know.
Now, this does require some research. You want to go in first knowing if the house is a hot item or not. If it is, I probably wouldn’t go too low. Most of the time others do not see the potential that you do, so it isn’t a problem. I would also research what the last sale price was of the house. This will help you determine how far off the asking price is.
Keep in mind you are not buying a home that is glamorous to others at this point, so chances are you may get a good deal. In some cases the owners just want to make a little or even just get our of it what they have in it.