House flipping has never been so popular, from t.v. shows, books, social media, no one can get enough of house flipping.
In fact, there are more house flippers than ever before, which is no surprise, for those with an eye for design, and a little real estate know-how you can make more money than ever. No wonder many are comparing house flipping, and real estate investing, to the modern day gold rush.
Before you run out and start buying subway tiles, and gray buckets of paint, knowing the key things to look for in a flip, is the only way you can be successful with real estate investing.
While knowing the trends or paint colors that can help sell homes is important, nothing can sell your flip faster than these 3 things that the pros look for when buying a flip!
These real estate truths are what professional real estate investors use to determine whether a flip will make cash, or flop hard.
Use these 3 factors to determine whether you should purchase that flip, or to keep on looking for the next investment!
Realtors and real estate investors love to shout from the rooftops: ‘IT’S ALL ABOUT LOCATION!’
How can you tell if a flip is in a good or even great location?
More often than not, finding a great location for a flip is finding the worst house in the nicest block, sometimes that can mean total tear-downs or homes that haven’t been up-kept.
Some key factors when looking for a great location are:
- Ease of Access: A great flip offers a short commute to major business parks, colleges, schools, and major shopping centers. Make sure the flip you have is easy to get too!
- A Great neighborhood: What make s a great neighborhood? A well-kept neighborhood with a lot of curb appeal, that is safe, and that one can be safe to walk around at night.
- Nearby Schools: If you have a good school district that is rated well and boosts great programs that will draw potential buyers to your flips location.
- Amenities: Shopping Centers, Gyms, Libraries, Fast Food, Restaurants, will draw potential buyers to your flip. Make Sure that your flip is located in short and easy access to ensure the best location for your flip.
Homes in good locations will not only sell faster, but attract more buyers, so having a flip in a great location is key to making money!
You have no doubt heard realtors or real estate investors claim that a house has good bones, but what in the world does that mean?
“When a Realtor, or real estate investor says a house has good bones, they often mean that the house has a great foundation and structure. Flips that have bad foundations of structural issues can be a huge money pit, so house flippers avoid those. Anyone who is looking to start real estate investing needs to know the signs of a bad foundation, and when to walk away from a potential flip.” Loren Howard, Prime Plus Mortgages- Tucson Hard Money Loans
Homes that have poor foundations or ones in desperate need repair can cost real estate investors thousands of dollars, so knowing when to call a professional is essential.
Signs of a bad foundation can be:
- Exterior Cracks : If a brick house has large and numerous exterior cracks, or you can see large cracks around the foundation, call a professional. These large cracks can be caused by a foundation that is falling apart, and may need to be completely replaced! the flip may need to be walked away from.
- Interior Sheetrock Cracks and Doors Out of Square and Uneven Floors. Foundation issues can’t always be seen on the exterior of the home, sometimes a poor foundation shows signs in the interior of the home. Doors that won’t close, or walls with cracks are signs of a poor foundation. If you see numerous cracks in the sheetrock, or doors are hard to close, or open, you may need to call a professional!
Structural issues can be hard to pinpoint, but tile cracks, bouncing floors, rotten wood, or walls that are pulling away can be extremely costly repairs that can make any investor go over budget.
Always consult a professional or home inspector if you aren’t sure about the status of the roof of a home, plumping, or electrical, as these are all extremely cost repairs that can make any flip go over budget.
Large ticket repairs will only drive up costs and decrease your profits, so finding flips with easy repairs, is the best way to make the most of your investment. Foundations, electrical, plumbing are all big-ticket items that will drive up the cost of your flip.
Some easy repairs that will boost your flips value are:
- Renovate bathrooms
- New Windows
- Remodel your Kitchen
Knowing the market your home is in, and working with the space the home has, is a great way to maximize your flip.
Bathroom renovations can be as simple as updating tile and finishes and adding a vanity or completely gutting for a better layout.
New Windows not only are cost efficient for HVAC but will improve the look of the interior and exterior of the home.
The question isn’t whether your should remodel your kitchen, but rather how. A small kitchen rehab can see major returns, from simple upgrades such as updating finishes, and new cabinet doors, while a complete remodel, including new cabinets, counters and tiles can also pay out depending on the type of the flip.
You can learn more about repairs you should make for your flip here!
Knowing the signs a good flip can save you time, money and help you maximize your profits.
It can be hard to find the best flip, but houses with the following can lead to major profit for flippers.
Look for these 3 things in a flip:
- Location: A Great location will be easy to access, and have nearby amenities that make everyday life easy!
- Good ‘Bones’: Avoid flips with foundation and structural issues, and aren’t in need for major renovations.
- Easy Repairs: Updating windows, kitchens, bathrooms are all part of house flipping, but avoid houses that need to be completely renovated.
About the Author: Catherine Way is a content marketer for business, mortgage, and real estate industries. She has written real estate articles for Prime Plus Mortgages, The Paper Source, Active Rain, and Progressing Income. Find out more about Catherine here.