When you decide that you're going to buy a fix and flip property, you're undertaking an investment venture. While highly rewarding in many ways, fixing and flipping properties is not a task to take on uninformed. If you're ready to start your fix and flip property journey, make sure you know these things before you get started.
1. Fixing and flipping properties is expensive.
This is not a venture that you can take on with $100 in your pocket and a little bit of hope. It's also an investment that can go south quickly if a property turns out to be a money pit or you turn out to have trouble selling, which means that you need to have a backup plan in place.
2. Fixing and flipping properties takes time.
Once you purchase a property to fix and flip, your available capital is tied up in that property--and it may take time before you can pull it back out again. Make sure that you won't have an immediate need for the money, that you're comfortable with the interest you'll need to pay, and that you can afford to wait out the market if you aren't able to turn your property around immediately.
3. You need the right contacts.
You won't be able to fix up a house and flip it on your own unless you have substantial construction experience--and that effort may be too time-consuming to make it profitable. Instead, you'll need an army of contacts within construction, real estate, and other related fields to make your house flipping venture work out successfully.
4. Location matters.
When you choose a home, don't just look at its potential. Look at the potential of all of the homes around it. The value of the surrounding properties often has a substantial impact on the value of the home you've chosen even if you put in the effort to fix it up.
5. You need a home that's in sound condition.
The best houses to fix up and flip are the ones that need primarily cosmetic changes in order to be successful. Make sure that you or one of your contacts knows how to easily evaluate a house to ensure that it has good "bones" and will be easy to turn around.
Choosing the house that's right for a fix and flip project takes time and effort, but it's well worth your investment. If you're looking for financing that will help you start your fix and flip journey, contact us today to learn how we can help.