Fixing and flipping houses can be a lucrative source of income whether as a full-time venture or as a gig to supplement your primary revenue stream. In certain instances, the profit from the sale of one property can even eclipse the average annual earnings or revenue of other careers and investments.
But a sizeable number of investors who try their hands at flipping homes end up in a fiery crash-and-burn. As they realize belatedly, there’s a lot more to flipping property than buying it cheap and immediately placing a ‘for sale’ sign. If you want to become a success at fixing and flipping homes, apply the following tips.
1. Identify Your Target Market
By determining the typical profile of the buyers who’d be interested in the property, you can develop a rehab plan that will lure them into closing the deal. Are your potential clients young couples looking for a simple, affordable starter home? Are they an older wealthier crowd that’s ready to splurge to get all the best and most expensive amenities? Are they emerging from a foreclosure on their home in the recent past and are trying to dive back into the market? (on a side note,House Heroes announced an insightful piece on preventing foreclosure).
The larger the audience you can make your property appeal to, the higher the chances of disposing of it quickly. On the other hand, the more diverse your audience is, the more you’ll have to spend on rehab to appease them all. It’s about striking a reasonable balance.
2. Rehab Plan with Your Audience in Mind
When you know who you are selling to, then you can better craft a rehab plan that will create the dream home for your potential buyers. Plenty of research must go into this especially if you are just starting off your property flipping business.
Establish what features, fittings and styles your buyers are most interested in. Go with an overall theme and don’t get into a redesign that’s too niche. General attributes are always a safe bet. It’s like creating a plain canvas of sorts. That way, the buyer can always make the more elaborate changes later on in accordance to their preferences.
3. Work with a Reputable Real Estate Agent
If fixing and flipping is not a full time job for you, then engaging a real estate agent would bring on board someone who can pick up the slack. However, even if you are flipping full time, a credible agent can inject the knowledge, expertise and networks required to sell the property quickly.
Agents know the most effective channels for marketing a property, they understand what buyers are looking for and they can provide useful pointers on things you may want to add or remove. You can find a real estate agent by talking to people in your social circle (family, friends and professional peers). Alternatively, run a Google search for agents in the area the property is located then zero in on agents who have largely positive reviews.
4. Price It Right
This is the most common mistake first-time flippers make. They’ll either price too high for the property to sell or they will go unnecessarily low in a desperate bid to recoup their costs quickly. A realtor would certainly be an invaluable asset as far as determining the right pricing goes. Nevertheless, you should start off your pricing decision by checking how much homes in the same neighborhood have sold for and how long it took to sell at that price.
Remember, a core component of successful house flipping is speed. You want to identify the price range that will give you a decent profit but one that’s so attractive that the property won’t stay long in the market. The longer the property remains in your hands, the more maintenance costs eat into your profit.
5. Stage It
An empty house feels cold, lifeless and uninviting. A good but empty property would fail to connect with buyers who have difficulty picturing how the home would be like when they move in.
Stage the property by applying a fresh coat of paint, placing furniture and installing accessories. Do it in a way that emphasizes the home’s best features. Keep staging simple to ensure it appeals to a broad range of prospective buyers. Use neutral hues, keep furniture pieces few and add elements such as magazines on the coffee table as that will evoke a homey feel.
6. Spread the Word
A real estate agent can be a great partner in helping you market the property. Nevertheless, it’s important that you ensure the house is getting as much exposure as it needs across all channels.
The property should be posted on your profile on Facebook, Instagram, Twitter and other popular social media platforms. Your personal networks on these sites can help you spread the word at virtually no cost to you. You could go one further and purchase an ad to target and extend your reach.
The process of fixing and flipping homes when mastered can rake in a consistently healthy profit. By applying the above tips, first time players can get into a systemic, profitable system sooner than later.