7 Tips for Your First Fix and Flip Property

Purchasing your first fix and flip property can be an exciting but nerve-racking time for any real estate investor. If you’ve been searching for advice, look no further: we have all the info you’ll need to succeed with your investment. Here’s 7 tips for your first fix and flip property.

7 Tips for Your First Fix and Flip Property

Pay for a Professional Inspection

Getting a professional inspection before buying a home can save you time and money. It's easy to overlook major defects like old electrical wiring and faulty foundations if you're not in the construction business. Monitoring a property is far less expensive than fixing structural problems; and a home inspection will be a fraction of what it will cost to repair structural issues or redo a roof. There is no substitute for a qualified home inspection, it is well worth the investment to pay a professional for an analysis.

Know the Neighborhood

A house's location determines how quickly, and for what price, it will sell. Choose a neighborhood that caters to your intended buyers: If your goal is to sell your finished home to young families, you'll be better off if it's in a neighborhood with top-rated schools. Never underestimate the power of developing areas for attracting more buyers and accelerating appreciation.

Don’t Over Improve the House

Refrain from adding trendy details and high-end touches when renovating a home. Although you might be tempted to keep up with the latest trends, most of the time these improvements add little to no value to the property itself. Stick to necessary repairs and basic features in your fixer-upper since the more you spend on extravagant upgrades, the higher you'll need to sell the house for to make a profit. Successful home flippers don’t over improve their properties, they add necessary changes that aim to increase the value of the property for a good price.

Stick to a Budget

The most crucial tool a would-be flipper needs is a spreadsheet, even though it may appear like a game of sledgehammers and interior design. Aspiring flippers can stay on track by creating a budget for the entire project as well as each specific step. It's unrealistic to believe that you can control every dollar you spend, though. As you alter the line items, remember to leave a buffer in each category to deal with any unexpected costs than may come up.

Build a List of Contacts

Building a network of contacts is necessary for people who wish to jump into the business of flipping houses. Your list of contacts should include builders, realtors, house inspectors, potential buyers, and material suppliers. Let’s face it, who doesn’t want buyers lining up along the block before that open house? Acting like a business owner and creating an online contact list will accomplish two things: It spreads the word about your properties before they're even ready to hit the market, and helps maintain the funnel of possible residences to flip.

Find Funding for Flipping

Investing in real estate can be costly in general. It can add up rapidly due to the high initial prices as well as the continuous repair expenses. To finance a flip, you'll undoubtedly require funding unless you have a lot of money on hand. When you’re researching funding options, a hard money loan may also be an alternative if you're having problems getting a standard loan. A hard money loan is a type of real estate financing where approval is based on a tangible asset, such as the property you intend to buy, as opposed to factors like income and credit score. Hard money lenders typically provide higher interest rates and fees since these loans generally have shorter terms than traditional funding methods.

Build an Exit Strategy

If you're serious about starting a full-time fix and flip business, your first flip must be profitable enough to advance you up the ladder. To achieve that, you must comprehend the dangers involved and develop a clear exit strategy. This should make it easier for you to handle any unforeseen issues that may arise, like a market that has changed since you started the project.

RCN Capital

RCN Capital offers short-term and long-term financing options for real estate investors. Whether you are looking to fix & flip properties or hold properties for rental income, RCN has flexible options that are suited to your needs.Connect with us todayto discuss your next real estate investment.