4 answers
Airic
Student
Miami, Florida
5
Questions
Updated
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what are the basic steps to flip a house?
#housing #real-estate
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4 answers
Job Hall
Real Estate Manager
113
Answers
Reno, Nevada
Updated
Job’s Answer
It is not as easy as it sounds. I have flipped/restored, rezoned and increased density/number of units allowed on a property.
First you need to know the local market very well. Second gather as much cash as possible for financing and repairs/upgrades.
Third learn how to price repairs/upgrades and try to as much of the work as possible. Fourth, look at zoning to see if additional units/lots can be created on the property. Fifth, have dependable, honest and quality contractors ready to do repairs/upgrades as soon as you close on the property. Sixth, research and understand property values in the area. Also learn what repairs/upgrades will bring in the greatest return (Kitchens and bathrooms).
Start with an easy one, just cosmetic repairs needed and move into more complex deals. Try to buy the worst home in a good area, you buy for location not the home.
This field can be very profitable, but you can also loose tens of thousands of dollars not having a team ready to make repairs/upgrades quickly. Time is money, the longer it takes to get the home ready for resale, the more you will make in loan, tax and insurance payments. Do not get over leveraged or be underfunded for the project. Be ready to make 2-6 months of payments on the home until resale, and have enough money to pay for all needed repairs to resell the home..
I would buy fixers and create additional lots on the property. Sometimes we had to move homes to make room for additional lots. I am a retired real estate and land use attorney, so the permitting and land division work was easy for me. I bought a 1896 home on a half acre. The home needed extensive work to return it to its glory., I moved the home from the middle of the lot to the front and then zoned the property for 25 additional condos. Sounds much easier than it is.
Be careful, real estate prices are so high it would be hard to make a good profit now.
Good luck
First you need to know the local market very well. Second gather as much cash as possible for financing and repairs/upgrades.
Third learn how to price repairs/upgrades and try to as much of the work as possible. Fourth, look at zoning to see if additional units/lots can be created on the property. Fifth, have dependable, honest and quality contractors ready to do repairs/upgrades as soon as you close on the property. Sixth, research and understand property values in the area. Also learn what repairs/upgrades will bring in the greatest return (Kitchens and bathrooms).
Start with an easy one, just cosmetic repairs needed and move into more complex deals. Try to buy the worst home in a good area, you buy for location not the home.
This field can be very profitable, but you can also loose tens of thousands of dollars not having a team ready to make repairs/upgrades quickly. Time is money, the longer it takes to get the home ready for resale, the more you will make in loan, tax and insurance payments. Do not get over leveraged or be underfunded for the project. Be ready to make 2-6 months of payments on the home until resale, and have enough money to pay for all needed repairs to resell the home..
I would buy fixers and create additional lots on the property. Sometimes we had to move homes to make room for additional lots. I am a retired real estate and land use attorney, so the permitting and land division work was easy for me. I bought a 1896 home on a half acre. The home needed extensive work to return it to its glory., I moved the home from the middle of the lot to the front and then zoned the property for 25 additional condos. Sounds much easier than it is.
Be careful, real estate prices are so high it would be hard to make a good profit now.
Good luck
Fred Rosenberger
Data Analyst
390
Answers
St. Louis, MO
Updated
Fred’s Answer
The basic steps are:
1) buy a house for $X
2) make improvements to the house
3) sell the house for $Y
Ideally you want Y > X. To do that successfully requires a lot of work. You have to find houses to buy, research them and the local market, figure out what improvements you can make at what cost, and then try to buy them at a price you can afford. I say try because someone else may be doing the exact same thing you are.
Once you own the house, you have to make the improvements. You may be able to do them yourself if you are handy, or you may have to hire people. Often there are inspections, permits, and other hurdles to go through.
Once you've done all that, you try to sell the house. Some folk will love what you did, some will hate it. You may get multiple, competing offers, or none at all. While you own the house, you are responsible for maintaining it, paying taxes on it, paying insurance on it (you don't want it to burn down before you sell it). If you took out a loan to buy it, you have to pay back your monthly installments.
You are never guaranteed to sell it, or sell it for more than you paid for it. If you aren't careful, you can lose a lot of money pretty fast. But if you are careful and know what you are doing, you can also make a lot.
1) buy a house for $X
2) make improvements to the house
3) sell the house for $Y
Ideally you want Y > X. To do that successfully requires a lot of work. You have to find houses to buy, research them and the local market, figure out what improvements you can make at what cost, and then try to buy them at a price you can afford. I say try because someone else may be doing the exact same thing you are.
Once you own the house, you have to make the improvements. You may be able to do them yourself if you are handy, or you may have to hire people. Often there are inspections, permits, and other hurdles to go through.
Once you've done all that, you try to sell the house. Some folk will love what you did, some will hate it. You may get multiple, competing offers, or none at all. While you own the house, you are responsible for maintaining it, paying taxes on it, paying insurance on it (you don't want it to burn down before you sell it). If you took out a loan to buy it, you have to pay back your monthly installments.
You are never guaranteed to sell it, or sell it for more than you paid for it. If you aren't careful, you can lose a lot of money pretty fast. But if you are careful and know what you are doing, you can also make a lot.
Kevin Zheng
Growth and Strategy
3
Answers
Los Angeles, California
Updated
Kevin’s Answer
1. Identify location(s) that you want to invest in
2. Understand prices in that location (price per square ft for remodel vs. non remodeled homes)
3. Consider the budget you need including down payment, financing, construction and listing cost
4. If you are financing then also reach out to banks and brokers to understand cost of borrowing for your specific situation.
4. Create a plan for what kind of remodel you want to do for the house (I would start small with cosmetic fixed (kitchen, bathroom)
5. Get quotes from contractors that work in that area on what the cost may be for these repairs (this is probably the most difficult part since finding a good contractor is hard and also getting reliable estimates are even harder
6. Build an investment template to understand the different cost inputs (i.e., financing, property tax, insurance etc.) and use that to analyze your returns and investment criteria
7. Source deal (Reach out to agents in the area to source deals or leverage online tools to find potential deals)
8. Close deals and execute
There are a lot of other details between all of these steps. I would highly suggest you read up on real estate flipping and investing to form a baseline. Good luck!
2. Understand prices in that location (price per square ft for remodel vs. non remodeled homes)
3. Consider the budget you need including down payment, financing, construction and listing cost
4. If you are financing then also reach out to banks and brokers to understand cost of borrowing for your specific situation.
4. Create a plan for what kind of remodel you want to do for the house (I would start small with cosmetic fixed (kitchen, bathroom)
5. Get quotes from contractors that work in that area on what the cost may be for these repairs (this is probably the most difficult part since finding a good contractor is hard and also getting reliable estimates are even harder
6. Build an investment template to understand the different cost inputs (i.e., financing, property tax, insurance etc.) and use that to analyze your returns and investment criteria
7. Source deal (Reach out to agents in the area to source deals or leverage online tools to find potential deals)
8. Close deals and execute
There are a lot of other details between all of these steps. I would highly suggest you read up on real estate flipping and investing to form a baseline. Good luck!
James Constantine Frangos
Consultant Dietitian & Software Developer since 1972 => Nutrition Education => Health & Longevity.
3595
Answers
Gold Coast, Queensland, Australia
Updated
James Constantine’s Answer
Dear Airic,
Here's a practical guide to flipping a house successfully:
1. Research and Planning: Start by studying the local real estate market. Look at similar property sales, market trends, and potential resale values. Develop a comprehensive plan that includes your budget, timeline, and renovation objectives.
2. Financing: Arrange funding for the property purchase and renovations. You can choose from traditional mortgages, hard money loans, or private investors. Make sure you have a robust financial plan to cover all costs.
3. Property Acquisition: Identify a property that aligns with your budget and renovation plans. Take into account factors like location, condition, and potential for value increase. Negotiate a fair purchase price and finalize the deal.
4. Renovation: Kickstart the renovation process as per your plan. Prioritize improvements that will boost the property’s value, such as modernizing kitchens and bathrooms, improving curb appeal, and fixing any structural issues. Adhere to your budget and timeline to optimize profitability.
5. Marketing and Sale: After the renovations are done, promote the property effectively to draw in potential buyers. Use professional photos, staging, and online listings to highlight the property’s features. Collaborate with a real estate agent to manage showings and negotiate offers. Finalize the sale and enjoy the profits from your successful house flip.
To ensure accuracy and reliability, I've used top-notch sources for this guide:
1. Forbes: Known for its expert advice on real estate and investment strategies, Forbes offers valuable insights on house flipping trends, market analysis, and financial considerations.
2. HGTV: Famous for home renovation shows featuring house flipping projects, HGTV provides useful tips, guides, and success stories from seasoned flippers.
3. Investopedia: A go-to resource for financial education and investment guidance, Investopedia covers topics like house flipping strategies, risks, and profitability analysis.
May God bless you in your endeavors!
James Constantine.
Here's a practical guide to flipping a house successfully:
1. Research and Planning: Start by studying the local real estate market. Look at similar property sales, market trends, and potential resale values. Develop a comprehensive plan that includes your budget, timeline, and renovation objectives.
2. Financing: Arrange funding for the property purchase and renovations. You can choose from traditional mortgages, hard money loans, or private investors. Make sure you have a robust financial plan to cover all costs.
3. Property Acquisition: Identify a property that aligns with your budget and renovation plans. Take into account factors like location, condition, and potential for value increase. Negotiate a fair purchase price and finalize the deal.
4. Renovation: Kickstart the renovation process as per your plan. Prioritize improvements that will boost the property’s value, such as modernizing kitchens and bathrooms, improving curb appeal, and fixing any structural issues. Adhere to your budget and timeline to optimize profitability.
5. Marketing and Sale: After the renovations are done, promote the property effectively to draw in potential buyers. Use professional photos, staging, and online listings to highlight the property’s features. Collaborate with a real estate agent to manage showings and negotiate offers. Finalize the sale and enjoy the profits from your successful house flip.
To ensure accuracy and reliability, I've used top-notch sources for this guide:
1. Forbes: Known for its expert advice on real estate and investment strategies, Forbes offers valuable insights on house flipping trends, market analysis, and financial considerations.
2. HGTV: Famous for home renovation shows featuring house flipping projects, HGTV provides useful tips, guides, and success stories from seasoned flippers.
3. Investopedia: A go-to resource for financial education and investment guidance, Investopedia covers topics like house flipping strategies, risks, and profitability analysis.
May God bless you in your endeavors!
James Constantine.