A common practice among individuals who try their hand at investing in real estate is attempting to flip a few properties. A run down ugly piece of property is purchased and resold to someone else at a price that both provides profit for the investor and allows someone else to acquire a home at a fair price.
If the individual who is doing the flipping (the real estate investor) is selling the property to a future homeowner, an appraisal of the home will be required by the buyer’s lender. The current condition of the property will have a big impact on that appraisal. The usual goal is to at least get a report saying that the property is in average condition for a house of that age. Average condition typically means that it will need some work to fix its appearance cosmetically and maybe one or two major repairs. The property cannot be in need of too many major repairs, it must be habitable.
Do not be the new investor that just sees dollar signs and buys a house to flip that everyone else has passed up on because it is a lost cause and should probably be demolished.
When flipping a property having a good time-frame in which to move the unit (not the dead of winter or holiday season) and staying within a budget that you have set for yourself are important to your success in this venture. There are also many other factors that will come into play. These will include: the amount of contracting that will need to be performed, the costs of supplies and materials in your area, having access to reliable and capable labor, and daily weather that may cause the work to come to a complete stop at times.
The first step that can be taken when one has decided to go into the flipping business is to find a knowledgeable real estate agent to consult. The agent will be able to inform you about some good options on houses that are up for sale and would be a good flipping project. Some agents are able to access public records which will give them access to a lot of useful information. They might be able to find homes that have been on the market for a long time which has caused the owners to be willing to negotiate and lower the asking price.
When a house has been chosen to be your next project and an inspector has completed an overview of the home, it is important to have a consultation with a contractor before making your offer to purchase. Make sure you have “good numbers” or lower the price you were going to offer significantly.
If the house does need any major renovations before going on the market, the flipper and the contractor should work together to set up a work schedule. The contractor should hire capable workers and supervise the construction but most investors still visit the job site regularly. During this process it is a good idea for the flipper to maintain open communications with the real estate agent. The agent will advise them on when to go ahead and put the property up on the market.
Lease Purchase Agreement For Real Estate 