If you’re thinking about getting into the lucrative business of real estate investing, you may be wondering where to even begin. Of course, you’ll want to make use of the resources available to you online and speak with anyone who has experience in the industry. But what about your first investment? Should you buy a property and hold it for long-term income? Or flip a home for quick gains? Or maybe dive into a multifamily home? In our opinion, we believe the fix and flip strategy is one of the best options for first time real estate investors. Continue reading to learn why.
They are simple in concept
Home flipping is great since it’s an idea that’s easy to understand, even for a beginner investor. Your goal is to acquire a home that’s in need of updates, or maybe some light repair, and after investing into these renovations you will then re-sell the home for a profit. Although this type of investing does require some basic real estate knowledge and planning, it’s not to the same level as more complex property types like large multifamily homes. You aren’t even necessarily required to be handy, as you can hire contractors and professionals that specialize in home renovation. If you find yourself struggling at any point, you can also lean on the help of a qualified real estate agent.
They’re a great way to familiarize yourself with the industry
Home flipping might also be the best way to get your feet wet with real estate investing. Along the way, you will learn everything from how to find the right property, to working with contractors and performing renovations. You’ll also begin to learn the skills necessary to run a successful real estate business, like how to budget for business costs and rehab expenses. Finally, you’ll have the chance to familiarize yourself with marketing and closing on a property after all the work is done. Once you have a home flip under your belt, you’ll be more prepared to explore other types of real estate investing.
They provide great returns
The other great thing about these properties is how much of a return you can receive from each flip. If you’re just starting out with real estate, chances are you won’t have a lot of capital for investing. Home flipping can get you solid returns, which can serve as a springboard for other types of investments. Plus, if you invest in a rapidly-growing or hot market, you can benefit from appreciation over time on top of gains from rehabbing. However, the real returns will lie in “sweat equity”: when you perform as many renovations as possible yourself, you save on costs, and you’ll get the most out of your home flip.
You learn what makes a good investment
There is a lot of work that goes into a successful fix and flip project. Not only does it require planning and dedication, but you’ll also need to learn which homes are actually worth flipping. Margins can be tight if you’ve picked the wrong property or a neighborhood that nobody wants to live in. But even if your flip doesn’t go exactly as planned, or you don’t receive as much of a return as you expected, it can at least serve as a great learning experience for you.
If you want to make sure that your investment goes well, it’s important that you select the right partners. Having the right people in your corner who can assist with your first real estate venture will make all the difference. An experienced real estate agent can make sure you get the right offer on your property, and an established lender will be able to provide you with resources and connect you with professionals to help your project go more smoothly.
Are you looking to secure financing for a real estate investment? 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 looking to acquire a loan for a home flip, RCN Capital has competitive loan options available. Connect with us today to discuss your next real estate investment.