Flipping a house isn't for everyone. However, if done correctly, flipping a property can be a profitable money-making proposition. Most people know someone that does this for a living and is good at it. Most people at some point have considered flipping a house and HGTV makes it look so simple. All you have to do is buy a fixer-upper, invest some money and made $50,000. However, the reality of flipping houses for profit isn’t quite as easy as reality TV makes it look.
The number one rule for property-flippers is that you need good credit to get into the business. It's recommended to have a credit score of at least 700 or higher to get approved for a low mortgage rate. If you notice that your credit score is lower, it is recommended to pay up old debts and to build back your credit.
The best strategy for flipping a property is to buy one in a HOT neighbourhood with high demand. This location would offer easy access to transportation, parking and shopping, and other services. When you have all the above, a buyer will be prepared to pay more for your property. The down payment should be at least 20% to help boost your chances of getting financing. The more you can put down on a property the easier it is to get approved for a mortgage.
Make money flipping homes in Waterloo and Kitchener
It's all about the math! Here is a list of some other things that you will have to consider when choosing a property to buy.
- You need to have a contractor you can trust
- What your renovations cost?
- What your closing and selling costs?
- What will be your carrying costs?
- Are there any tax implication of flipping this property?
- Do I have access to extra money?
Once you have decided on a property, you will also need to do some research on the following:
- Estimate your realtor's fees
- Estimate the total return
- Estimate the total amount of work
- Research the cost of permits
- Research local coding and regulatory standards
- Get a quote on staging services and allocate a budget for that
To know if a project is feasible, you will have to figure out the market absorption metrics for that area. This is a term used in the real estate market to evaluate the rate at which available homes are sold in a specific market during a given time period. This is calculated by dividing the average number of sales per month by the total number of available homes. It is recommended to hire a realtor to help you with this. It's important to work with a trusted Waterloo REALTOR® that has a good understanding of the market, area and where the buyers are. A smart REALTOR® will help you negotiate the best price possible for the home. They will also market your home on the MLS® System, social media and the internet, which will generate more interested buyers.
The ability to stay focused and be deadline-oriented is also important in flipping homes. To win this game you need to stay within a budget and make sure that the renovation continues even in tough financial situations and self-imposed deadlines.
Consider working with Mike Bolger from Chestnut Park Realty West. Mike has lots of experience in renovations and construction. Mike also has a large network of professionals that can help you with the upgrades.
Are you ready to learn more about real estate investing?
Call Mike Bolger at (519) 616-2656 now.
CONTACT MIKE BOLGER