Earn Money By Flipping Houses

Many novices overlook the basics when flipping houses and end up failing. The process is not as simple as it might appear. The basics consist of purchasing an old house in a dilapidated condition for a low price, making the necessary repairs such as repairing the plumbing, concrete repair, fixing broken spaces in the walls, removing old upholstery and replacing them with new ones, and finally painting the house before showing it to the prospective buyer. The most important thing is to follow the 70% rule. According to this rule, the investor should not pay more than 70% of the ARV (after repair value) of a property, minus the repairs required. The ARV determines the value of a home after is it repaired fully. Here are some tips that will help you flip houses like a professional and earn maximum profits.

More information on concrete repair

• If you have no idea about building construction, you can easily miss some of the major defects of the property you plan to purchase... including old electrical wire to a faulty foundation. These problems can inflate your repair costs. Therefore, seek the help of a professional house constructor and get him to inspect the house. It works out cheaper compared to the costs of hiring a crew to correct structural issues, redo the roof, or replacing the faulty wires of the property.

• Get hold of a building permit: While capable and smart flippers can recondition a home by themselves, not going through the appropriate channels may cause lawsuits, steep fines, as well as complications that can hamper the sale. As an example, mortgage companies and banks often dither to make loans on renovated houses that do not abide by local construction codes.

• Knowing the neighbourhood is vital: You can always get more money by flipping a home in a popular area of the city. For example, the area should be close to schools if you intend to market the finished home to families with young kids. This increases the chances of you getting a better price for the property. The neighbourhood is also important. Buyers always pay more for a home located in a safe neighbourhood.

• You need the help of a real estate agent: You can rest assured that you will get a better deal when you hire a professional real estate agent, whether you are buying or selling. Agents have a good idea of market conditions and have the skills required for negotiating. They will also provide you with ideas about renovating the house. Newbies often tend to add trendy details in the hope to increase the value of a property. The agent will provide you with precise details of what you should repair.

• Stop thinking about hefty profits: You might have heard stories about house flippers earning lots of money. However, this is not the truth. There is no guarantee of the margin of profit in this business. Many newbies hardly manage to earn profits, while some of them have had to sell the house at a loss. However, once you understand the basics of selecting a proper property, you can easily expect between a 7% to 10% return on investment.