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Property Flipping Boot Camp
By Vic Hurlstorm | November 17, 2008
If you are anything like millions of Americans you have probably caught countless shows on cable television that boast the serious profits that can be made by flipping houses. This is a true statement, seriously big money can be made when one goes about flipping property the right way, however, big money can also be much more easily lost when a property flip goes the wrong way. If you are hoping to find your way to fortune through real estate investing you need to pull yourself up by the bootstraps and understand a few house flip basics.
The first thing you need to understand is that the biggest goal in a project such as this is to make as much money in as little time as possible. This means several things to the wise investor not the least of which is that you must always have a complete inspection performed before you make any sort of financial commitment to the house. A good inspection will help you identify work that must be done, and whether or not there is any structural damage, or whether there are any big problems such as termites or water damage behind the walls that you aren’t able to readily see.
These are the most important items to know and should have a big impact on the offer you make on the property as they will have the greatest impact on how much you need to spend to make the property sellable and whether or not the property will even be profitable when you consider how much money you will need to spend in order to get it into selling condition and how much you can expect to sell the property for after that.
Once you have the inspection done it is a good idea to take into account all the things that will need to be done to improve the property and the things that must be done in order to get the property in sellable condition along with permits that are needed, inspections that are needed, and jobs that require licensed contractors in order to meet local code requirements. Each of these will take a big investment in order to complete and that should also reflect in your offering price.
Far too few would be house flippers manage to take in the big picture when making plans and this is where they end up missing out on the bigger profits that can be made by successfully flipping houses for the lowest possible investment with the highest possible return on their investments. When making your plans you will want to go with changes that are cost effective.
Avoid making structural improvements to the property unless you have a licensed contractor sign off on the wisdom and safety of those changes, as most of them can be very expensive as well as dangerous to the stability of the house. At the same time you should salvage as much as possible within the existing structure. Flooring and paint are almost always required in a house flip but you do not always need new cabinets in the kitchen or bathroom fixtures. Chances are new doors and hardware in the kitchen would be a great fix for drab and tired cabinetry while greatly impacting the overall look of the kitchen without robbing you of some serious profits (doors cost significantly less than making new cabinets and can add the appearance of custom cabinetry).
The biggest idea to walk away from house flip boot camp with is the idea that the most visual impact you can have on the home for the least amount of money the better. In other words you don’t want to purchase a home that needs new heating or air conditioning as they are not visual changes and are quite expensive. Find a house to flip that needs minor cosmetic repairs and a little dose of style and imagination and you will be able to maximize your profit. After all, that is what real estate investing is all about.
Please don’t forget to check out my blog at http://cashmoneyhousebuyerblog.com
Topics: investment properties |