By Kimberly Thurman
The idea of investing in property can be intimidating, especially if it’s something that you haven’t done many times before. The technique of Fix-and-Flip is an art and takes preplanning, hard work, and an eye to the future. There are several different aspects that need to be considered to make your first flip successful.
After establishing your budget, it’s crucial to stick to it as much as possible. It is easy to get caught up in the excitement of doing your first fix and flip, don’t lose sight of the bottom line (Where your budget needs to be). Remember your goal is to make a profit. Important questions to answer are: 1) What are similar properties in the same area going for? 2) How long are similar properties on the market before selling? 3) Are there any recent events that could adversely affect your market? If the property still shows as much potential as you would like, you can move to your next set of questions.
These three questions are where you can turn a good flip into a great one. They will have a huge influence on your investment and give you bargaining tools to lower your buying price. 1) How long has the property been on the market? Is the home is vacant? Owners are rarely prepared to cover the costs of two mortgages for more than a couple of months. 2) Has the price already been reduced? This can be a sign that the owners are already anxious to sell. 3) How much work, time, and investment will renovations require? This can be a balancing act. The more work the property needs, the lower your offer should be. Renovations can easily eat into your budget through construction and materials costs.
Using these tools and keeping your head, you can begin enjoying the satisfaction that is unique in turning a property. Remember, you want to make the most change to the property with the least investment possible – that is your key to success.