Fix and Flip Houses: How Do I Start Flipping Houses?
Flipping a house may seem like a simple process on paper, but can have complicated processes associated with it.
Unexpected costs and delays can occur throughout the process. There are simple steps you can take as you embark on your first home flip!
What exactly is “House Flipping?”
House flipping can be summed up as buying a house with the intent to sell it for a profit.
There are typically two ways you can invest in a distressed property:
1) Selling a potential property after fixes and improvements are made. This can be as simple as painting the walls a new color and installing new appliances. It can also be as complicated as completely rebuilding the entire property and adding in new modern features such as new plumbing, smart home devices and more.
2) Holding a property in a growing market. This option requires time and patience, but can require less labor and cost. You would essentially hold on to your property until there the market is more favorable or property appreciation has occurred.
Educate yourself on the market surrounding your property
It is important to understand the market that the property is in, and the growth in the surrounding area. You also want to consider the local taxes and how they apply to your potential house flip.
Remember that when you’re thinking about flipping a home, knowledge is everything! If you can, talk to local real estate agents/investors and other homeowners in the area who may be able to give you insights that aren’t obvious in your other research.
After searching online and visiting some properties, you may find one that piques your interest for a potential flip!
Create a budget around your house flip
A budget can help you decide what properties are within your price range and what you can afford.
Certain elements can snake their way into your plans for renovation so creating a budget will help you keep track of everything that you’re putting into your property. Having a contingency built into your budget is always a good idea.
Identify as much of the cost as you can, and then break them down so that you can spend more towards certain items and cut costs elsewhere. Home inspections can help inform your budget and potential issues that aren’t noticeable to the untrained eye.
Secure a hard money loan
Once you have a property picked out, you can turn to a trusted hard money lending partner to fund your flip. Hard money loans can help you secure a loan for your house flip in less time than other loan types. At DFW Hard Money, our loans can close within 24 hours.
After looking into the property you have selected, DFW Hard Money can provide you with a straight-forward terms sheet which will include all of the necessary costs. From there, you can make an informed decision on moving forward with your hard money loan provider!
With your loan secured, renovations can begin.
Renovations need to make sense for the neighborhood your property is in. Something as simple as new appliances or replacing sinks and toilets with more modern designs can be a good starting point for renovations.
Once the renovations have been outlined with your contractor, he or she can give you an estimate of when the renovations will be completed. This can help you plan for when your flip house will be able to go on the market.
Sell your property at the right time
At this point of time, your renovations should be completed, and inspections have been passed. All the hard work you’ve done so far has you led you to up to this point!
To help you in the sales process, it helps to find an experienced real estate agent. They can help you assess the current market, find appropriate pricing for the home, as well as guide you in through the necessary contracts.
Once a buyer has been found, and you agree to the terms of the sale, congratulations! You’ve completed your first home flip!
At DFW Hard Money, we work with you to provide hard money lending fast and with clear terms and conditions. To get started, contact us today with your property in mind and we can help get the process started!