Fix and Flip Tips
If you have an interest in real estate investments, you have probably seen shows or heard success stories from those who fix and flip homes. However, there is more to success than you may think. It takes strategic planning and careful research to succeed in this type of investment. Therefore, these are a few tips to help you get started.
You Need a Team
First, you need a realtor who has extensive experience and knowledge about the area. These individuals are key assets because they can find you the exact right property, one that has significant potential and a price below the market. You also need at least one contractor who can provide high-quality service at a reasonable cost. This individual should be available to help on your project quickly because every day you hold your property, you have to pay for it. Therefore, you want to shorten your holding costs as much as possible.
If you haven’t purchased or rehabbed a property before, find a mentor who has been successful in the industry for some time. This professional can walk you through the process, allow you to watch several investments and help you find your first. Also, add a mortgage broker, CPA and real estate attorney to your team.
Set Realistic Goals
It may seem like you can get rich quickly after a few fix and flip investments, but that just is not the case. Although this strategy can be lucrative over time, it may take several years and properties to create a sustainable income, and the work doesn’t stop there. Therefore, you need to set realistic goals.
Identify what types of properties you plan to flip. Then, figure out how much you have to spend and how many projects you can complete at once. Learn about true rehabilitation costs and timelines and how long you can pay your mortgage before you need to sell your property. Consider how many projects you want to complete in one year, three years, five years and 10 years. You should also determine how much you plan to or need to make on each flip.
Research the Market
The real estate market has changed over the last few years, especially in some areas. You cannot just rely on your team to guide you into your projects. You also need to research current market trends and local inventories. You need to gain extensive knowledge and continuously research every market you plan to invest in. Cities and counties can have very different trends even if they are right next to each other.
Success as a fix and flip investor requires hard work, dedication and knowledge as well as reliable financing and teamwork.