More Tips for a Successful House Flip, Part 3
Finding a foreclosure to flip is not the first step of the house flip process nor is it the last. How can you make sure that you can sell it, and sell it quickly? That’s one of the most common questions amongst house flip investors. Now that you’ve found you’re investment you need to address your finances to make sure that you can finance you new house flip. Do you have the skills you need to make the repairs, or will you be hiring someone to do the work for your? These are just some of the questions that you need to know before you even start looking for a home.
Make sure everything is in order before you start this process. Plan for the worse hope for the best, your house flip will be no exception to the rule. To help you in these plans it’s extremely important to stick with your budget, or you can lose expected profits.Ensure that the minute you decide you want to invest in a house flip that you have your finances taken care of. Make sure that your financial future is not riding on making a quick sale because though we hope and pray that all our flips will close quickly and with hassles, it might not happen in the time frame in which you expect it to. If you can’t afford to make a single mortgage payment, then unfortunately you can’t afford the house flip. Unfortunately all houses will not close when we expect them, it many cases they do especially if you’ve done your research up front, however don’t expose yourself to the risk. You don’t want to be distracted with the concern of your finances falling apart when your main concern needs to be getting the home finished and sold quickly.
To touch further on the concept of planning ahead, while most house sell quickly, you should never enter into a house flip without having at least 6 months worth of mortgage payments available to you. Having those reserves on hand is especially important in today’s economy when even the best properties are sitting on the market a little longer. If you have the reserves you can hold the property with no stress without lowering your price (assuming it’s priced right from the start).
Pricing your house right from the beginning is what you want to do. Over estimating the market value and then having to lower your price later will lead to a less successful flipping career, because you’ll will cut in to your future income in holding cost and at the lower sales price you will have less money to put into the next house.
Generally speaking nice well-kept houses in good neighborhoods at below-market prices sell relatively quickly. For a successful house flip, though, it’s important to plan for every eventuality, and to stick to your original business plan and budget if you want things to work out the way you want in this business endeavor.
