You've most likely seen the many TV shows appearing on stations like TLC and HGTV - one show that comes to mind is Flip That House. These shows are both entertaining and educational but I wonder if they leave most of us thinking we can do something we truly can't. Many of these shows highlight seasoned real estate professionals with the ability and know how to get the job done; they often make it look easier than it truly is. Here are some things you might want to consider before flipping your first home.
1. The Market - How's the real estate market in your area? Are homes selling? More importantly are homes like the one you want to buy selling? Many people might think that because the market is slow they should not attempt flipping a home when in reality it's a great time. Slow markets present a lot of good deals and if you find the right house, in a good neighborhood, at the right price, you could have the perfect flip.
Flip Down Tv
2. The Home's Condition - Is the home within your expertise? How long will it take for you to get the home ready to sell? How much money will it cost to get the home ready to sell and sold? Do you have the time and ability to manage the project and see it through completion? You'll need to consider the monthly mortgage payments that you will incur during construction in addition to any costs related to labor, supplies, selling and financing the home. As with any investment, make sure you're ready to assume the risk and can afford to lose big.
3. Getting More Value - A good way to optimize your returns when flipping a home is to discover what the home needs to give it a good value boost? Things like adding another bathroom, covered patio or making the kitchen larger can add a lot of value to a home. Consult with local Real Estate Agents to get their opinion on what will make the home worth more and sell quicker.
4. The Homes Cost vs. Appraisal - Make sure you get a professional appraisal on any home before you decide to take on the task of flipping it. You'll also want to consider how much the home can be worth; a good way to do this is by researching what similar homes have sold for in nearby neighborhoods. If the home is not considerably less than its appraisal, it's probably not a good idea to attempt flipping it, especially in a tight market where homes can sit for months without selling.
There are so many things to consider before taking on a "Flip" but the payoff of a successful project can make the risk well worth it. If you're not a real estate professional, or even if you are, be sure to consult a few professionals with experience in different real estate fields before committing to something that could leave you high and dry. Getting advice from professionals in a few different fields could save you from a potential disaster and help get you the most money from your investment.