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If your clients are real estate investors looking to make money flipping houses, they’ve likely noticed how competitive the market has become. The US housing market is in need of more homes, and the low supply of properties drives up prices and makes it harder for investors to find houses worth flipping. Still, there is potential for a great return if investors are able to find a good home and capitalize on the high demand. In order to find success with home flipping, it will be necessary to come up with creative strategies.
It is true that there are lots of opportunities for people who know how to go through the challenges. You are in a unique position, as a broker or lending partner, to be able to help your clients achieve all their goals. You can empower them to become an indispensable part of the journey by swiftly maneuvering through complexities in property flipping strategies and providing them with the right resource information. In this blog, we will be covering 7 tried and tested ways of flipping in a competitive market that can add to your client's bottom lines and take your business to the next level.
1. Understand the Competitive Landscape
The initial step in being able to flip correctly is to help your clients identify the right market. Opportunities may be emerging that they cannot find just by looking into their immediacy, especially when low inventory is causing shortages and driving prices higher almost everywhere.
How Brokers Can Help:
- Market Analysis: Use your knowledge to identify current trendy markets where demand is high and growth potential is apparent. Clients will need informed decisions based on figures on median home values, inventory levels, and demographic trends data.
- Target Demographics: Help clients understand who their ideal buyers are likely to be. Are they young professionals, families, or retirees? Having the strategy tailored to a particular demographic can increase the chances of success.
By guiding your clients to the right market, you set them up for a profitable flip from the start.
2. Look for Hidden Gems
In a competitive market, the best deals often fly under the radar. Motivate your clients to think differently while searching for houses to consider.
How Brokers Can Help:
- Off-Market Deals: Use your connections with other brokers and the general real estate community to find off-market property listings that are not available for public consumption at the moment. Such gems often come at much lower competition and price.
- Auctions and Foreclosures: Suggest looking into home auctions or foreclosures, which sometimes can yield amazing returns for less educated or savvy investors.
- Networking: Tell your clients that they should let the word out on the specific property they're hunting for. A lot of times, the best deals come from personal testimonies.
By helping clients uncover hidden opportunities, you position yourself as a valuable resource in their flipping journey.
3. Crunch the Numbers
One must prepare a financing plan for a successful flip. Help your clients analyze potential properties to make sure they are making a sound investment.
How Brokers Can Help:
- The 70% Rule: Teach clients the 70% rule, which states they should pay no more than 70% of a home's After-Repair Value (ARV) minus renovation costs for healthy profit margins.
- Renovation Budgets: Work with clients to define their scope of renovation work so that they can prepare an accurate budget. This gives them an accurate view to save costs and maximize returns on investments (ROI).
Through the numbers, you encourage them to make much bolder yet more informed decisions.
4. Speed Matters
In a fast-moving market, time is of the essence. Encourage your clients to grab the chance when they see a desirable property.
How Brokers Can Help:
- Pre-Approved Financing: Work with such lenders as RCN Capital to obtain pre-approval on financing for your clients, allowing them to move when an excellent property deal comes along.
- Contractor Connections: Facilitate developing the network of good quality contractors that can begin work immediately after a purchase is made.
By emphasizing the importance of speed, you help clients stay ahead of the competition.
5. Maximize ROI with Strategic Renovations
Not all renovations will increase the property's value. Teach your clients which upgrades would be most beneficial in adding value without going bankrupt.
How Brokers Can Help:
- High-Impact Areas: Recommend kitchens, bathrooms, and living rooms, as those spaces usually spend the most on buyers.
- Trendy Upgrades: Add modern amenities like an open-concept layout, energy-efficient appliances, and smart home technology.
You guide them to the smart renovations, ultimately maximizing their ROI and concentrating on those things that will appeal to potential future buyers.
6. Pricing Strategy: Competitive Yet Profitable
Pricing a flip property is a delicate balance. Help your clients find the sweet spot between competitive pricing and profitability.
How Brokers Can Help:
- Comparable Sales: Getting data on recently sold homes in the area can help set less competitive listing prices for the clients.
- Profit Margins: Remind clients to factor in all costs-acquisition price, costs of renovations, and holding costs when deciding the sale price that meets their end game.
Price the properties well and set up the potential for quick profitability from sales.
7. Make the Property Stand Out
In a crowded market, a standout listing can make all the difference. Help your clients create a property that buyers can’t resist.
How Brokers Can Help:
- Professional Photography: Recommend hiring a photographer to take quality photos of the property.
- Virtual Tours: Suggest adding a virtual tour to give buyers a better idea of the space.
- Social Media Marketing: Encourage clients to advertise their property on social media, real estate groups, and agencies to reach a wider audience.
By helping clients create a standout listing, you increase their chances of attracting multiple offers and achieving a higher sale price.
Why Brokers Like To Work With RCN Capital
At RCN Capital, we understand the challenges that face people flipping homes in a competitive market, which is why we deliver speedy, flexible financing solutions specifically for real estate investors.
Why Brokers Partner with RCN Capital:
- Fast Closings: We can close loans in as few as 10 business days, helping your clients move quickly on opportunities.
- Competitive Rates: Our loan programs offer attractive rates and terms to maximize your clients’ profitability.
- Broker-Friendly: We value our broker relationships and return with competitive commissions, fast approvals, and dedicated support.
Whether your clients are flipping their first property or their fiftieth, RCN Capital has the financing solutions they need to succeed.
Conclusion
Flipping houses in a competitive market is a tough task; however, with proper strategies and support, your clients can achieve phenomenal results. For that, be all-inclusive with them in terms of guiding their market analysis, helping them select a property, renovating it, and pricing-it becomes one with them as your client in the business.
And when it comes to financing, RCN Capital has them covered. Fast closings, competitive rates, and broker-friendly terms make us an ideal partner for your client's fix and flip projects. Ready to take your brokerage to the next level? Connect with RCN Capital today and see how we can help you and your clients succeed in the competitive world of property flipping.