Fixing and flipping properties is a great way to make a large amount of money fairly quickly, but a lot of people struggle with the basics, especially if they are completely new to investing in property. Some basic guidance at the beginning of your journey can go a long way to helping you figure out exactly what you need to be doing and how you can get started on your flipping journey.
With that in mind, we have decided to compile a short list of the basic steps to flipping so that you know everything you need to take your first steps along the road to fixing and flipping.
Know Your Budget
Before you can even think about purchasing a property to fix up, you need to know how much you are able to spend at each stage. First, decided on how much you are willing to pay for a property, including any fees that you will need to pay out to a real estate agent. Stick to this number at all times when you are starting out, so you don't get in over your head. Now, earmark the money that needs to be set aside for the work that needs to be done on a property. This will be an approximate value before you get the chance to actually look at some properties, so always err on the side of caution and have more than you need.
Buy A Property
The key to successful flipping is to buy properties at as low a price as possible and then fix them up so that they achieve the highest possible profit. As such, it is not always a good idea to buy directly from an owner unless they are selling for considerably less than the market value. Instead, try speaking to banks and other financial institutions and find out about properties that have been foreclosed on. You can also try heading to auctions to see if you can snag yourself a bargain that way.
A key part of flipping is fixing the property up. You aren't going to make any money just buying and then selling the property as is, so make sure you know what work needs to be done to provide the largest return on investment. At this stage you should also be securing relationships with workers that you can trust, as it is likely that you will be working with them for the long term if you are aiming to keep flipping properties. Don't always go for the cheapest, especially if you doubt the quality of work provided.
Once the home is fixed up to the standards you expect, it is time to put it on the market. It is usually best to work with a real estate agent here, unless you are confident that you can sell the property yourself. If done right, you should find that the price you can ask exceeds the amount you have spent by quite a margin, meaning you have successfully flipped the property when it eventually sells.
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Please note the content is not intended to be, legal or investment advice. You should consult a licensed attorney or realtor for advice regarding your individual situation.
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