Buying and renovating properties to sell for a profit is an excellent way to make money with real estate. These types of investments, known as home flips (or fix & flips), can generate significant returns for investors. They can also be completed in as little as six months when planned and executed properly, which is great because as the saying goes: time is money. Home flipping may also serve as an investing steppingstone as the returns can be used to fund other, more permanent investments. Have you been considering a fix & flip for your next real estate investment? Continue reading to learn how to maximize your returns.
Renovating for a Profit
A successful real estate deal starts with choosing the right property to invest in. The most profitable homes for flipping will be those that are in great neighborhoods. If you can find a lower-cost or neglected home in a great area, it can then grow to match the value of surrounding homes.
With home flipping, you also have to perform the right renovations to the property. Ideally, you want to choose the ones that will add the most value to the property while costing you relatively little. High traffic areas like the kitchen are a great place to start, but exterior upgrades and landscaping can also make a huge difference to the home’s curb appeal.
Understanding Your Target Market
Knowing who you are trying to sell to will allow you to focus your marketing strategy and can help increase your return. For instance, a home that includes extra bedrooms and is situated in a safe neighborhood will be great for family-oriented buyers. High-end homes will include features that other homes will not because they target a different segment of the market. Take some time to research the demographics of your particular market. It may provide you with insight which can help tailor the direction of your marketing efforts.
Creating A Great Property Listing
The key to fetching a high sale price will be creating an eye-catching listing that stands out from the rest. One way you can do this is by taking great photographs of your renovated property. The photos should cover every room in the home and also highlight the main features you want to show off. Consider hiring a professional real estate photographer for the best results. Don’t forget to consider your target market when creating your listing so you can catch their specific attention.
You can help your listing stand out even more by staging the property to show its potential off to buyers. With modern technology you can even virtually stage a home at little cost to you. Staging is a great way to make your renovated property look more complete, and can even lead to a higher final sale price.
The most effective way to sell your property quickly is by leveraging channels outside of the MLS. Real estate groups on social media can be a great way to market your property to a bigger audience. Also, be sure to work with a qualified real estate agent who will be able to network with buyers and other agents. Once you feel like you’ve drummed up enough attention, you can turn to more traditional marketing strategies like hosting an open house to reel in the serious buyers.
Sealing the Deal
You will want to ensure you are pricing your property strategically in order to get the most out of the sale. There are also a few different ways to approach this. For example, you can work to create a stellar property listing targeted towards premium buyers, or you can look at comparable listings and price your property competitively to attract multiple buyers with competing offers.
The final part of the sale process you will need to master is the closing itself. If you’re working with a real estate agent they will be able to assist you with closing paperwork and communication with buyers. Regardless, you may want to brush up on your negotiation skills so you don’t end up on the bad end of a deal. Be firm when it comes to crucial aspects of the deal, such as the final sale price, but also be willing to consider reasonable requests from potential buyers to ensure a positive and successful transaction. It will be important to stay organized and responsive to requests so that the process can go smoothly.
The easiest way to save on your next investment is to obtain financing from a real estate lender that can get you the best leverages and rates. RCN Capital lends to real estate professionals, commercial contractors, developers & small business owners across the nation. We provide short-term fix & flip financing, long-term rental financing, and new construction financing for real estate investors. RCN Capital has competitive loan options available if you are looking to finance a home flip. Connect with us today to discuss your next real estate investment.