Home flipping continues to be one of the most popular way for investors to find success in the real estate space. When done right, flipping properties can provide great returns, and their simple nature means they are easy to get into even for beginner investors. Not every home makes a great flip, however, and sometimes it can be hard to find the right home to invest into and turn a profit on. There are certain qualities which make a home worth flipping that you may only learn through experience or research on your own part. Luckily, we’ve compiled a list of tips that can help point you in the right direction and get you one step closer to finding your next home to flip.
Avoid Costly Repairs
If you want to have a successful flip, you’ll need to avoid properties that require costly repairs. The easiest way to do this is to have the property professionally inspected before making any purchase agreements. Remember that time is money, and if a home needs extensive repairs it may simply not be worth your time. Structural damage is another problem to avoid since it can completely eliminate your profit margins.
The best home to flip will be one that can be updated quickly, at a minimum cost to you, and sold as fast as possible. You should target renovations that will add a lot of value, like updates to the bathrooms and kitchen, and a fresh coat of paint to the rooms.
Research the market
It’s a good idea to take some time to learn the trends of any given real estate market. See what type of home sells quickly and what doesn’t. Look into which areas or neighborhoods people are moving to, and capitalize on the demand in these areas to maximize your property’s value after rehab is completed. You don’t have to limit your options to markets near you either. All across the US there are metropolitan areas that can be considered “hot” markets, seeing huge growth every month. Purchasing a property in these markets can lead to considerable returns over time on top of any gains from rehabbing.
Choose a great location
As mentioned, location makes all the difference when you’re selecting a property to flip. For starters, nobody will want to live in an unsafe neighborhood, but there are other factors to consider as well. Proximity to good schools and amenities (like shopping centers) can have a huge effect on demand. Ideally, you will want to purchase a lower cost home in a great neighborhood, as opposed to the most expensive home in a bad one. That way the property will have room to grow and match the values of surrounding homes, and you won’t have a hard time selling the property either.
Remember to look off-market
Often, the best deals won’t be found at online listing services; instead they’ll be found off-market. Talk to wholesalers, take part in auctions, and look at REO (Real estate owned) properties to find your next home to flip. You can also try to find off-market properties yourself, and make offers directly to the owners. Even if a property isn’t listed for sale, the owner may be willing to accept the right offer. If you’re still struggling to find the perfect property, consider hiring an agent that specializes in flips and off-market properties.
Get financing sorted out beforehand
The easiest way to save on your next fix & flip investment is to obtain financing from a trusted 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. If you are an investor looking to finance a home flip, RCN Capital has competitive loan options available. Connect with us today to discuss your next real estate investment.