Where to Look?
You are looking for properties that can be purchased below market price. That means in addition to seller’s listings online you need other sources. Consider looking on Craigslist for rental properties and reaching out to the owner to see if they would consider a sale of the property instead. You may also find listings of real estate “for sale by owner.” These listings can also be a way to find a property at a discount.
What’s Your Money Situation?
How are you planning to buy that flip? Are you going to use cash (your own or someone else’s?). Do you have a bank that will lend on the majority of the project? Are you considering working with a hard money lender? Many lenders have sites where you can check out their criteria and the criteria for their lending. You will also want to assess your personal financial situation, including your credit score since some lenders may refer to those for approval.
How Much Work Does it Need?
When it comes to flips, especially when you are starting, less is more. Projects that have big budgets need more time. There are houses you can find that will need less work. Consider projects where you can replace flooring, paint, and appliances. For bathrooms, are there easy upgrades that can be made quickly? This level of a project not only gets you started but allows you the time and space to learn. Projects that are primarily cosmetic typically work with budgets of $30,000 to $50,000.
What Can You Sell it For?
Check the sales of similar houses in the neighborhood. What are they selling for? In addition, check out what features they have. You want to find houses that are most similar to the one you will be flipping. Look at the style of home, the square footage, and bedroom and bath count. You want to find the most similar home for the closest price comparison. You want to find a house that has enough room for-profit and a bit of wiggle room for any unexpected costs. If nothing happens, then you just get an extra bump in your profit.
While house flipping can be profitable, it can also take time to find the right project. Following a simple breakdown can get you started on looking at numbers so that when you find the right house, you’ll be ready to take action.
Want to buy a property and renovate it?
I have a freebie checklist that will help you — 8 Things I look for When Purchasing a Home. Just click here to download it.
Love before and afters?
Looking to buy a house to renovate? Check out the fixer upper checklist to help you find the perfect house.
For more inspiration for home renovations, follow me on Pinterest @thresholdhomesmn