It is never fun to lose money on your real estate investments. It is not fun to invest a lot of your sweat, time and money into finding and renovating a property so that you can flip for a profit. As an investor, it is important to realize that successful flipping is more than finding the right property and making the required renovations. You should also be able to relist and sell the property later on.
House Flipping is an Art
House flipping is not for people with weak temperament. It is important to be meticulous, patient, and even emotionless at times. The process of finding a suitable property, renovating it, and flipping it for profit can take a lot out of you. It is not like the 30-minute episode on TV.
It is quite common for people to make offers on multiple properties before one is accepted. If someone tells you that he/she has had plenty of offers rejected, you immediately know that they are doing it right. He/she is being patient and thorough and not letting emotions get in the way and not settling for overpriced properties. While it might appear rudimentary, it is important to first review the three stages of the process of flipping houses for maximum success:
1. Finding the Right Property
Finding the right investment property is the most important stage of house flipping since it is where you will make your money. If you overpay for a property, you will find it very hard to flip it for a profit later on. You can find excellent free resources from experienced real estate investors and house flippers online to help you with this important step.
2. Renovating the Property
Property renovation is the messiest stage of the house flipping process. It is where you invest your time and money so that you start seeing the aesthetic improvement. Finding the right property might be an important step, but most mistakes happen during the renovation phase. A first-time flipper should work with an experienced person to ensure that improvements and repairs go as smoothly as possible.
3. Selling the Property
Selling the renovated property is the third and final stage. It is at this juncture that your determination and hard work pays off. If you have found the right property and done the necessary renovations, then selling it will be much easier. However, selling a property is not as easy as it sounds.
4. Setting a Fair Price
Everyone would like to make money especially considering the meticulous searching and manual labor that goes into finding and renovating a property. However, if you decide to overprice the property, it will be hard for you to sell it. The end buyer does not care the amount of money and effort you put into the entire process. What he/she cares about is what he/she is getting and will not overpay just because you worked hard on renovating it.
5. Educating Potential Buyers
Educating potential customers about what you did to the property is still an important step. It is the perfect opportunity to market your home and let potential customers know what an amazing deal they are getting. It is impossible to list all the improvements you made, but choose 2 or 3 of the biggest ones then use those as selling points. For instance, you can tell potential buyers about the renovated master bathroom, refinished hardwood floors, and new HVAC unit. Avoid focusing on how bad the property was previously, but rather focus on how beautiful it currently is.
6. Using Professional Pictures
Professional images can make a significant difference when it comes to real estate listings. Do not take amateur photos, and professional photography is ideal. A professional real estate photographer uses the right equipment, understands flattering angles, and is worth each dollar he/she charges.
7. Social Media Marketing
You will naturally want to list your property on Zillow and other popular listing websites, but your marketing efforts should not end there. Social media can be a powerful ally when selling a property. A professional business page is not even necessary. Post about the home on your page and request your close relatives and friends in the area to do the same.
8. Use the Services of a Real Estate Agent
First-time house flippers quickly realize that the process of buying, renovating, and flipping a property for profit is never a one-man job. Success requires an entire team of people. You must never attempt a For-Sale-By-Owner (FSBO) transaction since there is simply too much at stake. An experienced agent will help you protect your investment and maximize your profits.
The Bottom Line
Investing in property is an excellent way to secure your financial future especially if you buy properties and flip them for a profit. However, it is important to have the right advice if you would like to be successful with house flipping and real estate investment in general. The tips provided here will take you from beginner to expert house flipper within the shortest time possible.