How To Flip a House

“Flipping a house” is a term used in real estate for buying a below-market priced property, remodeling it to increase its value, and then re-selling it for profit. By following some guidelines, you might start enjoying the perks of this side of the real estate business. Here are the steps on how to flip a house:

Step 1:
Learn the basics in the real estate business. Feed yourself with the knowledge required on how to purchase and sell a house or a condominium unit. Looking for a mentor may be very helpful. Get to know a real estate investor or a real estate broker to provide you with information that you need to know, and also you may keep them as your reference or for when you need advice on your future transactions.

Step 2:
Drive around to look for a house or a unit. When looking for a home, consider the improvements that you have to make for it to be sellable, since it should only cost you a little money for the improvements. When you spot one house that you might be interested in, drive through the place at different times to observe if the neighborhood is safe and comfortable to live in. Also, check with the police department for the location’s crime rates to ensure a high probability of buyers after you modify the unit.

Step 3:
If you do not have experience in remodeling a house, consult a home inspector. The inspector will move around the house to list the problems that he finds. Major systems such as electrical, sewer, plumbing, etc. should be checked, because if major repairs are needed, it will cost you a lot. After checking these systems, another problem that should be looked upon is termite damage and roof leaks. Determine also the changes that need to be done in the bathrooms and the kitchen.

Step 4:
After determining the parts that need repair and improvement, list all of it, then separate the ones that you can do yourself and the others that need labor from skilled workers or contractors, as this may require special knowledge, a permit, or a license. Then calculate the cost of all the repair and improvements to be done. Set aside a certain amount for additional costs, for circumstances that are unforeseen that you may encounter.

Step 5:
Now, do the computations to determine whether the house you are eyeing is “flippable” or if it has the potential to give you the profit that you want after modifying the place.

• Approximate sales price – Total cost = Profit

Step 6:
Examine the probability of how soon you can sell the house by studying the real estate market. Make a plan B, just in case the property does not sell as soon as expected.

Step 7:
If you think the house may be a good investment, you can now buy the property and then start the remodeling.

Step 8:
After the remodeling is finished, you can start having your property advertised. Potential buyers are expected to call and inquire. Here are some tips to remember:

• When you start advertising the house either online or in newspapers, represent it with clear and honest photos.
• Maintain the cleanliness of the house while it is for sale.
• You can do a little landscaping on the home’s exterior for additional appeal.