Experts say that it is just as possible today to become wealthy in real estate as it ever was but you’ll need 3 things to get started; good credit, at least some cash and of course the right strategy. The big question is what are the proper strategies? Plenty of us have good credit and “some” cash but what’s the secret ingredient to becoming the next Donald Trump? Here’s the right way to “flip” your way to fame and fortune!
Fixing up rundown homes and selling them for a profit is still one of the best ways to make it big in real estate but there are a few “catches”. First of all you will definitely need some cash to get started. Obtaining a mortgage for a fixer upper is more difficult than getting bank approval for a home that you intend to live in and be forewarned; you will be competing with persons that have the ability to make instant all cash offers. Still, if you have the means (or easy access to credit) this is a great way to make a return on your investment.
Rehabbed homes are still in demand and if you time it just right it is possible to make big profits when flipping a home. The best time to sell is when home prices are on the upswing. That’s why some investors will “sit” on a home that they have already finished. They are waiting for home prices to peak to get the best price for the home. That’s a great strategy if you have the time, if not, it’s best to sell for less and move on to the next project.
Finding the right property is also a big part of the equation. The best method to locating that perfect investment home is to find the “ugly duckling” in an area where home prices are on the rise. Research is the key to success here. Check the recent sale prices of homes in the immediate area and also take the time to determine how long it took them to sell. Experienced investors recommend selling the home in no more than 60 days and moving to the next one as quickly as possible. As you can see, luck is a definite part of the process but choosing the right home in the right area at the right time has a lot to do with being successful.
Do your homework before you buy your first diamond in the rough! The biggest mistake that investors make is buying the wrong home to flip. A home that costs too much or needs too much work will eat into the profits and that is a fatal mistake. Unless you intend to do all the work yourself be sure to get at least 3 estimates from contractors that you trust. Let me say that again, T R U S T. I’ve heard a thousand stories where the contractor was the problem and not the house. Finally, before you sign on the dotted line don’t forget about the additional expenses you will incur when you do finally sell the home including closing costs. A qualified realtor can help you to determine all of the expenses incurred when selling a home.