Have you thought about Flipping houses?
A lot of people looking to make money in Real Estate go to flipping, and it can be a great way to work your way up to your dream house or create a business for yourself.
We are not even going to look at the flipping process at all, instead we are going to look at what happens before you purchase anything. A quote I heard when I was young and adapted for me is "Plan for the worst, expect the unexpected, and hope for the best." Today we are just focusing on the Plan part of that, so before you jump into a new adventure, here are some tips to think about beforehand if you think you want to flip:
1. When you are looking for a property to flip it will be important to find a home you believe is listed below the price you would have paid for it, but at the same time you don't want to end up with something that isn't worth your time. If a home has structural issues or foundation problems, you are going to be doing way different work than if there is asbestos to remove, which will be way different from fire or water damage. So, know what you are buying and make sure the value adds up. Working with a REALTOR® is a great way to help weed through all the listings to help you find the right property for the right price for you.
2. You can also look at neighborhood trends and try to predict which neighborhoods are going to become more desirable and that the home you want to build will fit into well. This is also something that a REALTOR® can help you with. Although we cannot accurately predict everything, we do spend most of our time reading and learning about the market, so we may be able to direct you towards areas that are on the verge of becoming very popular. It's also something you can do without knowing to much about real estate, because chances are the areas you find appealing others are probably finding appealing as well.
3. You also want to look into township ordinances to make sure that the changes you want to make are allowed to be made, check where and how to pull permits, zoning laws, and anything else that might pose a roadblock for you once you do actually buy. Every township and borough and town and city has different rules for what kinds of properties they want and where they want them. Zones for residential only, or industrial, or commercial properties. Regulations or residential or commercial building heights. Areas which have or don't have access to public water, sewer or gas. You want to make sure that the property you buy will allow you to build what you planned to otherwise you are stuck with a property and no plan.
4. Find and make friends with local contractors if you aren't planning on doing it all yourself- and even if you are, because things happen. While taking this project on yourself is something that can been done, you will need to consider the time it will take you, the skill set you have, if you will be staying in the home or nearby and the problems that might arise from those choices. regardless of whether you are going to DIY it or hire someone you are going to want to make sure you know who to call if something goes wrong.
5. You can also use this time to work with a lender to look into different loan types. A good lender will also be able to help you work on your credit to get it where you need to meet your goals. There are mortgage loans for just about everything. You might use an investment mortgage loan, or a fixer upper loan, or maybe using your first-time homebuyer's loan. Working with a lender will help you find the most up to date loans that are going to best help you achieve your goals.
6. Put together your scope of work. This document is going to help you out so much and you can start it before you buy. This details everything you plan on doing to the property. When I was studying for my entrepreneurial degree, I heard a quote that went something like "Prior Proper Planning Prevents Piss Poor Performance", and I think I found this to be the most invaluable thing to take with me through everything in life. I was taught this as a way to drive home why I needed to crunch numbers and create 3 and 5 year projected cash flow sheets, but I use it every single day of my life, and I am using it now to drive home the point of creating your scope of work. I can guarantee that you will be way more on budget and on time if you plan out your work ahead of time. Like really plan it out. Take the time to price out the materials, the contractors, the mistakes, your work, all of it. The more thought and time you put into this, the easier the project will go and the less stress you will endure.
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