Helpful Tips for Flipping a Home
The business of flipping homes can be a lucrative and fun investment. Although each property is different from each other, the entire process is much the same. Experts see flipping homes as a process that takes years of experience to devise. Beginners may feel overwhelmed with steps many unknowns involved from start to finish. Here are some tips for flipping a home and generating profit for beginner investors.
1. Location, Location, Location! The most important tip is to buy a home in a desirable neighbourhood that is attractive upon resale. Schools, amenities, parks and bodies of water are some landmarks that buyers look for. Being close to one or more of these can also widen your market segment. Saavy investors often buy property with the thought of who the end consumer will be. Commuters often look for properties close in proximity to highways. Homeowners that want to save on car expenses buy property along public transit lines. Seniors often buy homes close in proximity to hospitals in case of an emergency. Students buy property close to their university or college. In your community, look for the neighbourhoods that offer the most amount of potential. In doing so, profits will yield much higher, regardless if the real estate market is hot or cold.
2. Condition of the property. Forget the cosmetics and finishes of a home. Look beyond the glits and glamour and see what the condition of the home's structure is like. The foundation and exterior structure of a home are often the most expensive to fix. Cracks in the foundation lead to leaks, and get worse over time as weather changes. When looking in the basement of a home, look at the integrity of the posts and beams. Rotted beams can lead to serious structural damage over time. Metal posts and beams offer long term support for the home. Inspect the exterior brick or siding for any cracks which are indicators of settlement. Un-level floors throughout the home is a sign of compromised floor joists. A good trick is to take a marble or a level with you to each home to check for even flooring.
3. Look for the Easy Fixes. As you search for a flip, seek out homes with minor updates needed. The easiest way to give a home a face lift is adding new floors and paint. This alone will freshen up a home and are more labour intensive than it is costly. Bigger projects such as kitchen and bathroom renos should be contracted to professionals.
4. Proximity to where you live. Over the length of your project, you will be making many trips throughout the day back and forth from home. Deliveries, progress check ups and meetings with contractors are just a few daily tasks. Longer trips result in lost valuable time and effort, especially after a long day of work!
5. Focus on the most important room of the house. The kitchen is notorious for being the most important room in a house. Buyers often enter a home and head straight for the kitchen to see the functionality and space. A growing trend homeowners seek is open concept kitchen - dining room. Analyze each home to see if there is an option to open a wall and create an open layout. Open space creates the option for having an island for more counter space and storage. Majority of your efforts should be spent on the kitchen making it appealing to future buyers.
6. Seek undervalued properties in your area. Estate sales and bank foreclosures often come to market. It's important to work with a local Realtor who understands your local market trends. Trust a Realtor with first hand experience in flipping homes. They know what properties are undervalued and create instant equity upon acquisition. Most likely they also have a network of trades that will help you throughout the process.
7. Hiring the right Lawyer. When hot deals hit the market - investors must act quickly before they sell! Investment properties are typically more complicated than the average real estate transaction. Bank foreclosures often have extensive, complex paperwork that needs to be thoroughly investigated. There are also different mortgage rules that may take effect based on investment property. Hiring a competent and efficient lawyer can save you thousands of dollars and secure the deal on time. Lawyers must also be able to close deals under tight deadlines. Be sure to hire a trusted lawyer that specializes in real estate and understands deadlines and changing laws in your local community.
These helpful tips will earn you higher profits and will sustain your business in the long term. The main focus for all investors is staying within their budgets and maximizing opportunity. If you are unsure about anything - ask the experts! They offer support, knowledge and experience that will benefit you. A Realtor on your side is critical to your success!
If you are in the market to buy and flip homes as a business - call your Niagara Realtor Daniel Passero, Remax Niagara direct at 905-704-8783
RE/MAX Niagara Realty Ltd., Brokerage
261 Martindale Rd, Unit 14C
St. Catharines, Ontario