No matter how easy the home improvement shows make house flipping appear, starting with a clear plan before you even purchase the property will maximize your profit and shorten the amount of time necessary to complete the flip.
1. Evaluate your skills. Are you a handy person who loves to wield a sledgehammer and knock down walls? Or are you a real estate guru who brings a vast knowledge of market trends? Where ever your particular skills lie, be sure to evaluate your abilities and know when to bring in help.
2. Assemble your go to team. In this case, the clichés “two heads are better than one” and “it takes a village” aren’t so cliché. After you’ve looked at your strengths and weaknesses, you’ll realize you need some help along the way from people who are experts in their field.
People to consider adding to your team include: an accountant, attorney, insurance agent, inspector, real estate agent and last but not least, a reliable contractor.
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3. Set a budget. One of the most common mistakes made when flipping a house is overspending. Know what you can afford to spend and stick to that number. Learn to expect the unexpected.
Walls get opened, surprises are uncovered and you’ll need a contingency set aside to take care of your surprises. Don’t forget to plan for the money you’ll need to finance, hold and sell the home.
4. Research the market. Know what will appeal to buyers looking for homes in the neighborhood. Design with your potential buyer in mind, so knowing the market trends is a big plus.
Keep your design pallet neutral. Let the buyer imagine what color they are going to paint the walls. But, choose darker flooring so they can envision themselves enjoying their new home, not cleaning muddy footprints from the off-white carpet.
Ready, Set, Renovate!
5. Kitchens sell homes. People are looking for kitchens with open floor plans, updated cabinetry and high quality countertops. The good news is that these renovations don’t have to be budget busters.
An open floor plan is easily created with a little low cost demolition. Cabinets don’t always need to be replaced; resurfacing or painting can often save you thousands. This means you can invest your kitchen dollars in a high quality countertop.
6. Bathrooms should sparkle. A bright, modern, clean bathroom is what is important here, not a large luxury space. Neutral colors, clean showers and a new toilet is often all that is needed to sell a buyer on the bathroom.
7. First impressions count. Don’t forget the landscaping. A little goes a long way. A mowed lawn, trimmed bushes and some colorful flowers give the home curb appeal and a positive experience as they enter the front door.
Sell
8. Patience. Be sure your desire to sell doesn’t lead you to put the home on the market too early. A home that is nearly done when being shown can lead to a list of buyer requests that eat into profits. It is better to wait until the flip is finished.
9. Find qualified buyers. It is much better to request buyers with mortgage pre-qualification. Little is more frustrating than believing you’ve found the perfect buyer only to have the deal fall through due to a lack of funding.