Fixing and flipping houses is a very scary proposition for someone new entering into this business! Like any new business, you need to protect your investment by doing the proper planning and build in the appropriate contingencies to ensure your success rate. The difference in today’s market is the savvy investor must account for many obstacles to ensure success.
The new flippers are smarter and doing much more preparation work before taking on a flip. Please consider these three points, among many, for positioning your business for success.
Price: With today’s market being flooded with properties, you must consider how cheap you can buy a property. Price is probably the most important aspect for a successful flip. You have to purchase the house for a price way below the market to ensure a reasonable profit. Equally important you need to understand, with a weak market, how much you can realistically sell the flip for! Now for the hard part, how much money is it going to take to complete all the improvements? These are all important numbers in calculating a successful flip, so again do the proper planning and know these numbers prior to ever making an offer on a flip!
Partnerships: Don’t be afraid to forge partnership with the right organizations to help you with your flip. Ask yourself, what do I need to be successful? Are you not good at construction? So, recognize this and forge a relationship with a contractor. Are not sure you have the assets to finance the flip? So, realize this and begin forging relationships with a lender, broker, or angel. Determine what will make you successful and move on it.
Patience: Don’t take on first property you see. Please use the appropriate financial tools to calculate your numbers, prior to making an offer on the flip. You need to ensure the numbers work or walk away from the opportunity. Also, keep in mind it will take you much longer to sell your flip in today’s market. Therefore, you need to account for a longer sales period, which will extend your investment, assets, and the amount of mortgage payments. It may take you 6, 9, or even 12 months to resell you flip to recoup your investment. Make sure you understand your market and the constraints in reselling your property, so you can again do the proper planning.
These are just a few thoughts for you to consider as you move into your flip business. There is and will always be risk in flipping houses. You need to recognize your risks and do the proper planning to ensure your success!
Copyright © 2007. FixtoFlip Inc. All rights reserved.
Dan Dunleavy President,
FixtoFlip Inc (954) 889-7092
http://www.fixtoflip.com/
The Tools and Resources you need to Fix and Flip Real Estate Profitably!
Other Blog Entries:
Flip Tips:(Flipping Houses) Buyers Market, so Why not invest?
Flip Tips (House Flipping) A Newer, Smarter, Flipper
Flip Tips 2. (Getting Connected)
Flip Tips (House Flipping or Rehab)
FixtoFlip.com has a New Integration for Adding House Flipping (Rehab) Properties.
Watching The NumbersNot All Doom and Gloom
1 comment:
Yes, we have noticed the margins are much smaller, so you can't miss anything.
Post a Comment