Flipping a house can prove to be a lucrative endeavor if done correctly. But a few mistakes can also mean the difference between profit and loss. In this post, we’ll share some key tips and insights to help you ensure a worthwhile return on investment (ROI) for your flip property. Specifically, we’ll offer insights on comparing properties, determining profit margin and setting realistic expectations in regard to the cash needed to invest in a flip project.

Location, location, location

When searching for a home to flip, location is just as important as in any other real estate transaction. Inexpensive areas with great potential are ideal. Research future development plans and watch for signs of big things to come – infrastructure projects, widening of streets, new shopping centers – all of these can be indicators of an up-and-coming neighborhood.

Carefully plan your profit margin

Planning your profit margin is a critical step in flipping a house. Determine what you plan to make on the deal and then compare that figure against your costs. It is also important to consider holding costs and time in this equation.  If you decide you are in over your head with flipping a home, consider selling it to Ryan’s Buying.  You will earn quick cash and not have to deal with the nightmare that you mistakenly walked into.

Find out how much cash it will take

Investors with little experience flipping houses will likely need to secure large amounts of cash – typically 20%-40% of the sale price. But investors can sometimes reduce the amount of cash needed by brokering a deal in which the lender receives a percentage of the profits from the sale. Experienced investors with a proven track record are more likely to secure financing from hard money lenders that requires little, if any, private money or down payment.  If you are not able to secure financing on the property and need to wholesale or sell it before securing the title, give Ryan’s Buying a call for a free valuation.

Find a hard money lender you can trust

Once you’ve found the house you plan to buy and flip, and determined what your profit margin will be, securing financing is a crucial next step. It is important to research lenders, especially those experienced in financing flip projects. Look for hard money lenders with competitive rates and a quick turnaround time.   Hard money can cost up to 5 points and 10% in interest, this will dramatically reduce your profit, call Ryan’s Buying prior to spending way too much on lending.

Make the right improvements

When it comes to making improvements to your flip, there is certainly a sweet spot. By not making enough improvements, you may see little interest in the property or even lose a sale. Over-improving a home can increase your costs and shrink your profit margins. Go into the deal with your “eyes open” as to the needed repairs, as well as the latest home technologies and advances in order to ensure the home is competitive in the market.

Do the work right

Making top dollar on a flip shouldn’t meant cutting corners. Once you’ve determined what improvements must be made before selling the home, consider hiring sub-contractors to do the work. In addition to saving time, this is especially important if you lack the necessary skills to successfully pull off a renovation project.

Price to sell

Any serious flipper will attest to the fact that efficiency is key to success. The quicker you can close on a home, complete improvements and sell it, the quicker you can start on the next flip and continue to generate profit. But in order to keep the process moving quickly, it is important to price the home correctly.  If you know you do not have enough time to properly flip the home, consider going to www.ryansbuying.com and getting a free valuation in 30 minutes, you could earn money for doing nothing.

While it may be tempting to overprice the property in a hot market, in most cases sellers find more success pricing the home correctly to generate interest and offers. That’s not to say that correctly pricing a home will prevent you from “cashing in.” in fact, it could result in a bidding war among potential buyers.

Get to flipping

Flipping a home can be a profitable undertaking with a little planning, foresight and effort. By referencing the tips outlined in this post, you can establish a strong foundation for flipping homes in a manner that is both efficient and lucrative.  If you buy a property to flip and realize it is way too much for you, call Ryan’s Buying to give you a fair market value assessment.  We will purchase the property from you and allow you to earn something for your find.