Is it possible to flip a home profitably in 2019? Everywhere, there are reality shows and Instagram channels that portray flipped homes inside a heavenly halo, but do the investors genuinely profit from selling these homes? Is flipping homes a real career option for you, or someone you know?
These are questions anyone following real estate market trends will ask in 2019. Having some experience and training in real estate investment and selling does help in minimizing the risks. Check out what Phill Grove says about the risks and benefits of investing in real estate rehabbing in 2019.
Here are some of the things you can do to maximize your profits from your upcoming home flipping project –
- Buy the property at the lowest possible price. The best possible price should always be significantly lower than 70% of the after-repair value (ARV) of the property, excluding the repair costs of the same. You will need a good idea of the repair costs and expense of raw materials to estimate the right buying price of the property.
- Guesstimate the total work necessary on the property. Whether it is a residential property or commercial property, you need to consider the complete repair that might be necessary. It is essential for estimating the total amount you will be spending and at the same time, maintaining a steady profit from the sale of the flipped property.
- Check out trusted contractors. You may already have some contacts from your days in B-school, or you may meet new people from the training courses we have mentioned above. Nonetheless, always employ teams you have already met or worked with. If you are new, vet the contractor thoroughly against their online reviews and ratings.
- Complete the paperwork on time and submit permit requests before the project begins. Your contractor team should take care of the building permits and other invoices. However, make sure to keep copies of the endless load of paperwork that you will go through in the next couple of weeks. Remember to file the permits on time since getting approvals from the municipal government office can take significant time.
- Get ready to archive endless volumes of paperwork, bills, and invoices. You will need to preserve them for tax audits. Filing these receipts in one place, for example, a work email, can save you a considerable headache in the near future.
- While looking for buyers, don’t become desperate. The market sees highs and lows depending upon the national economy, tax bills, and average interest rates on loans. If you are not getting a lucrative offer, you might consider renting the property out for a while to recuperate the costs and then again try to sell it after a couple of months.
Knowing the potential risks of flipping homes will help you remain calm and make the right financial decisions at all times. In reality, the world of flipping and selling homes comes with no guarantee. That is one truth every real estate agent and home flipping expert accepts during the first-leg of their journey.