As a postgraduate, I have learned much knowledge about real estate. Although the industry of real estate has broken up, I feel most of the people still have the chance to get rich by flipping real estate. Here are some steps you should take before you decide to invest in real estate flipping.
Loan-acquire a loan that is much lower than the one you currently have for the home you live in, and buy another home for about 70 percent or less than its true value. It’s imperative that you have the appropriate amount of capital to even begin to make money on real estate flipping.
Locate-choose a desirable location. If you buy a house cheap, put a lot of money into it, and then can’t sell it because there’s a nuclear power plant a mile away, you may find yourself with a beautiful house but no potential buyers. Do your homework and talk to real estate agents in the area about the viability of the market. Don’t sink hard-earned money into a house until you know that the market is solid and there is reasonable potential for a quick sale.
Choose-seek out dilapidated homes in nice areas that have no major structural defects. Choose to do only cosmetic improvements, such as painting, landscaping, new flooring and carpeting, installing new bathroom fixtures or replacing kitchen appliances. Taking down walls, building new rooms, or gutting out basements may not yield as high a profit and you may wind up losing money. Stick to the types of improvements that won’t drain your wallet.
Improve-become a home improvement expert and do the work yourself. Improve your skills by purchasing home improvement and repair manuals, talking to people with experience flipping real estate, searching websites for information, or taking classes online or at your local home improvement store.
Rent-rent the house out after you make the improvements if the market is slow and you can’t sell it right away. You can sometimes ask two times what your mortgage rate is which will allow you breathing room to make the mortgage payments and also set aside a little money for flipping your next home.
Extend-form relationships with real estate agents and contractors who may eventually be in a position to do business with you for less than their standard fees. Also, learn all you can about building and code regulations in the area in which you are purchasing the home.
After finishing all steps, you should inspect the house from top to bottom, fix only the worst cosmetic blemishes, and then sell it as a handyman special. Buyers usually underestimate the cost of renovating and come in high on their bids so you can still yield a large profit.