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How to Flip Your Fix-and-Flip

Eager to take on your first fix-and-flip investment property? Before you dive in, there are some important tips to keep in mind that can help you make the most of your investment while appealing to the greatest range of potential buyers.

Start With Comps

Always take some time to get to know the neighborhood before you invest in a fix-and-flip property. In general, you’ll want to focus on improvements that will be most appealing to local buyers—and you can learn a lot about what local buyers want by looking at nearby homes. This research can help you get a better idea of where you should spend your money to see the biggest returns.

Don’t Overlook Curb Appeal

No matter where you’re looking to sell a fix-and-flip property, curb appeal will be vital. Many of today’s buyers won’t even set foot inside a home if it doesn’t look inviting and charming from the outside. This means you’ll want to prioritize projects that will enhance curb appeal, such as repainting exterior siding, installing new landscaping, and possibly even replacing an old mailbox. These small improvements can make a big difference in getting potential buyers in the door.

Focus on Staging

While it will cost some money up-front to have the home professionally staged, any experienced fix-and-flip investor will tell you that this is a service worth paying for. Having a home staged is a great way to help potential buyers envision themselves living in the home. Specifically, the right staging can highlight the home’s strengths while also defining living spaces that may otherwise be overlooked.

Create a Beautiful Listing

The majority of today’s buyers are finding properties online, so it’s more important than ever that your listing stands out from the rest. This means that you need to have plenty of high-quality photos of the home inside and out. It may even be worth it to hire a real estate photographer and/or videographer to make sure that the home is captured in the best light possible. You might even consider offering a video walk-through or virtual showings of your property.

From there, crafting a compelling listing that highlights all the upgrades and amenities that the home has to offer is a must. If you’re not experienced in writing your own real estate listings, this is where it may be worth hiring a professional to handle this for you.

The Bottom Line on Fix-and-Flips

Flipping a house requires a lot of hard work and patience—but when you follow these tips, you can make the most off your investment. At the same time, you’ll be providing somebody with the house of their dreams. Looking for help financing your fix-and-flip project? IMC Money has you covered. Contact us today to apply!

How Do You Determine An Offer Price on a Fix-and-Flip?

One of the most important aspects of making sure your fix-and-flip venture is profitable is knowing how much you should pay for a property. When you add on the cost of any repairs and renovations you make to a home to the price you paid, you need to be able to sell the home for more than that amount in order to consider the project profitable. If you end up paying too much for the property, you will struggle to break even when it comes time to sell. The following tips will help you determine how much you should offer when you’re buying your next flip property.

Calculate the ARV

The ARV, or after repair value, refers to how much you can expect to sell the home for when you’re done renovating. Starting any project without knowing the ARV already puts you at a disadvantage. The best way to accomplish this goal is to work with a realtor you can trust. Their knowledge of the current market, as well as how much similar homes in that area are selling for, is invaluable in determining what you can expect buyers to pay. Focus on homes that recently sold, rather than those that are currently listed to ensure you know how much buyers are actually paying versus what other sellers are expecting. Only use data that is three to six months old because of how rapidly the market can change.

Determine Your Costs

Renovations will always cost money, whether you handle them on your own or hire contractors to complete them for you. The cost of these repairs and renovations is critical to determining how much you should pay to ensure you can make a profit in the end. Some changes, such as new carpeting or painting a few rooms, can be done rather affordably, but if the home needs more extensive work, be sure you get several quotes from contractors, so you know exactly how much to budget. Keep in mind homes that require more extensive repairs are a riskier investment than those that simply need cosmetic changes or upgrades because of the risk of hidden problems you may uncover through the process. Always plan for a few extra expenses to give yourself a cushion.

Don’t Forget Other Expenses

When calculating your costs for your fix and flip, don’t forget about the usual real estate costs that come with this type of investment. You will need to cover closing costs when you purchase the home and may even pay the buyer’s closing costs when you sell, if that’s part of the deal you make. Unless you have the funds to invest yourself, you’ll also need to get a loan to buy the property, which means making payments with interest until you’re able to fix and resell the home. Finally, if you work with a realtor, there will be commissions to pay on the selling price of the home. When calculating how much you should offer for a property, don’t forget to factor in these costs as well.

Should Your Project Be a Rental or a Fix and Flip?

When you’re looking at a potential investment property, one of the most important questions you’ll need to answer is whether the property is better suited as a rental or a fix-and-flip project. This is one decision that even some of the most experienced investors struggle with.

If you’re considering a real estate investment and aren’t sure which route will be best, there are some considerations you should keep in mind to help you make the right choice.

The Property’s Current Condition

The current and overall condition of the property, as well as its age, should play a major role in your decision to either buy the property as a rental or flip it. Generally, older properties will require more long-term maintenance and upkeep, which tends to make these homes better candidates for fix-and-flip investments.

Meanwhile, a newer property that needs some up-front work but is otherwise in decent condition may be more suitable as a rental. The exception to this may be a property that is located far away, which can create additional headaches for you as a property manager/landlord. If you’re investing in a property from afar, your best bet is typically to treat it as a fix-and-flip (unless you’re comfortable shelling out monthly fees for a property management company’s services).

Local Real Estate Trends

You’ll also want to consider local real estate market trends when deciding whether to buy a property as a rental or a fix-and-flip. While there are currently more renters in the residential real estate market than ever before, this won’t necessarily be the case in the exact area where you’re looking to invest. Taking some time to truly get to know your local real estate market and whether people are looking to rent or buy can make your decision a much easier one.

Your Budget and Preferences

If you’re looking for a property that can start generating income for you sooner rather than later, then a rental may make more sense. On the other hand, flipping a property rather than renting it out can prevent your money from being tied up in any single real estate investment for too long.

Of course, part of your decision to rent or flip will ultimately come down to personal preference. Some investors simply don’t like the hassle of playing “landlord” and would thus refer to flip and property, sell it, and be done with it. Likewise, other investors may enjoy the long-term income string that a rental property can provide.

Need a Hard Money Loan?

Regardless of whether you end up flipping or renting out an investment property, you’ll need to secure the right funding to get started. If you’re searching for a hard money loan for a real estate investment property, IMC Money is here for you. We offer a wide range of hard money loans and other financing options to suit your needs. Contact us today to find out more about our services!