Tips for the First-Time Home Flipper
If you’re on the search for a new side job with a sense of autonomy and a hands-on approach, flipping a home might be the best choice for you. Renovating a home and selling it for profit is nothing new, but there’s more to the process than you see on TV. If you’re a first-time home flipper, here are some crucial tips for your renovation endeavors.
Play it Safe and Get a Home Inspection
When you’ve found the right house for the right price, be sure to take the extra step and get a professional home inspection before making your purchase. A home inspector will be able to turn up issues with the home that you might not be aware of. From problems like warped wood floors and leaky ceilings to a cracked foundation or mold, a professional inspection is an absolute must. A home inspection can also help you bargain down the initial purchase price, which in turn will increase your end profit.
Take the Time to Find a Motivated Seller
It can be easy to get rushed and make a quick choice when you’re eager to make a purchase and begin your first-time home flip. However, certain sellers on the market are much more inclined to settle on a lower price than others. If you’re new to the home renovation arena, it’s important to be aware of all the factors that go into finding the absolute best bang for your buck. So, who are these motivated sellers?
For starters, searching for a seller that’s undergoing a foreclosure is an excellent way to dodge competition in the open market and purchase an inexpensive home for cash. Other motivated sellers that you may not have thought about can be individuals that are going through a divorce, job-change, or sudden life event. If you take a little extra time to search for sellers with a sense of urgency, pressure, and even a bit of disposition, you will likely be able to haggle down the purchase price.
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Be Smart and Research the Total Cost of Your Project
For first-time home flippers, it can be easy to miss all the extra expenses aside from purchase price and renovation costs that go into selling a home for a desirable profit. It’s important to study up on all the different factors – large and small – that you’ll have to account for when it comes to allocating your money. It is also recommended to add a 15%-20% buffer to your estimated renovation costs in case something unexpected does turn up. Several extra expenses include:
- Federal and State Taxes – These taxes will apply when you make a profit on your sale
- Appraisal and Inspection Costs – Both of these steps are highly recommended and fairly costly
- Real Estate Commission – Remember that a percentage of your final sale will go to your real estate agent.
- Title Searches & Transfer Taxes – These are two tedious but costly expenses that will likely apply
- Unpredictable Expenses – Many renovations will turn up a few addition costs that simply can’t be foreseen upfront
When You Design Your Flip, Take Yourself Out of It
If you’re a first-time home flipper it can be tempting to fall in love with a renovation project as you watch it go from “raggedy old shack” to “admirable spectacle”. This might lead to personal preferences being incorporated into the many aspects of a homes redesign. Why is this a bad thing?Well, flipping is a short-term project that should be less about specifics and more about mass appeal. While you may personally adore amber bamboo wood floors and marble or granite countertops, it might not make a huge difference to the future buyer of your flip and may greatly increase your renovation expenses. Essentially, remember that your flip should be quick and efficient and your redesign should be kept relatively neutral to appeal to the widest possible audience.
Get Ahead of the Game & Contact Us
In your search for the best-fit home to flip, you will want to make sure that you’re making the smartest possible investment. With CRS Data, you can find the most precise and current property data across multiple counties, with an easy-to-use user interface that makes browsing through property data a breeze. Find housing listings and FSBOs promptly and conveniently with our industry-leading software. Get on the fast track to finding the right renovation property and Contact Us today.