Basic House Flipping Tips for Beginners

Posted by Radmin on March 26th, 2020

Investing in house flipping is financially rewarding. But it's not without some challenges. The trick is to do your due diligence to make sure you know what you're getting yourself into.

Indeed, house flipping has great money-making potential. To help you get started, here are essential tips for you to consider.

Choose the Right Neighborhood

Consider an old house in a reputable or up-and-coming neighborhood. The homes in such communities are likely priced above the usual value. After renovating them with new appliances, features, and structural repairs, they'll sell for even more.

Plan Your Budget

When it comes to your budget, it's best to be conservative, especially if you're just starting out. Leave a little buffer for unforeseen expenses, such as unexpected repairs. The buyer's inspection report may also reveal items that need to be fixed before closing. You have to prepare for that as well.

By leaving some buffer room and being conservative with your numbers, you'll have a better chance of making a significant profit. If your budget isn't enough, you can always approach loan companies that specialize in hard money lending.

Choose a Less-Than-Desirable House

Look for a home with a solid foundation and structure but has not-so-pleasant features, such as cracked or chipping paint, broken windows, and unkempt yard. These issues are easy to deal with and can lower the price of the property.

Stay away from properties with major problems, such as a damaged roof or faulty plumbing system. Be sure to check the house personally to avoid surprises. Consider bringing an agent or experienced contractor with you to identify possible issues.

Price Relatively Lower to Negotiate Higher

Once you put the home up for sale, consider pricing it a bit lower than its actual value. A newly flipped house is appealing to buyers. Since they're most probably familiar with the real estate market, they'll see your project as a great deal. They'll feel a sense of urgency and make an offer.

You'll likely get you multiple offers with this tactic. It will allow you to negotiate for more cash and sell the house faster than if you priced it high from the start.

It's possible to make a living from flipping houses. If you're worried about the initial funding, consider taking out hard money loans from Austin lending companies. The key is to do it now and not wait for opportunities to come to you.

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