Flipping houses has become one of the mainstays of commercial real estate investors at all levels from newcomers to seasoned veterans who have made lifelong careers out of flipping houses. Flipping houses can provide a good source of revenue with each sale, and understanding the strategy behind the process is simple.
Buy Low, Sell High
The whole point of flipping houses is to renovate and sell a property for a profit. Investors should check listings, work with property wholesalers, or simply drive around their surrounding neighborhoods to see what homes are for sale. The idea is to purchase a property that is listed below market value and needs major updates and remodeling. Unlike construction from the ground up, flipping houses is much easier. Even if the house needs to be taken down to the studs, that leaves a blank canvas to create an interior that will attract buyers.
Little Touches Yield Big Results
Some people approach house flipping by putting in the bare minimum effort to get revenue from a short sale, at which point anything that happens afterward is the responsibility of the buyer. However, adding some quality touches during the renovation stage can greatly increase the value of a property without breaking a budget. Not every house needs Carrara marble, but installing energy-efficient heating and air conditioning, smart appliances, engineered hardwood, and more allows house flippers to raise the listing price on a property and boost their bottom line.
No Immediate Buyers? No Problem.
Most major renovations on older homes attract new buyers, but not every house sells immediately. House flippers should be prepared for this and make contingency plans. When scouting out potential houses to flip, look at where the house is in relation to schools, shopping areas, and commuting routes for work. Try to assess whether people are moving to the area, or if the neighborhood is stagnant. Check local legislation to see if there is going to be major construction in the area and how the results will impact the neighborhood. All these factors can impact how long it will take to sell the house. If the house does not sell immediately, one way to generate revenue is to rent out the property until the market is right for selling.
Flipping Houses and Financing Options
There are several financing options for house flippers. Conventional commercial real estate loans are usually a good fit for purchasing house flipping projects. From there, bridge loans can be used to cover immediate costs and ensure renovations stay on track. At Web Finance Direct, we offer a wide range of commercial real estate financing solutions that can be tailored to fit the size and scope of your next house flipping project. Contact our team today to get started.