Real Estate Marketing & Beyond
Most likely you know that the real estate prices are going up and there aren’t too many houses to sell. This further leads to difficulties in investments or house flipping, for example. You may be familiar with all the reality TV shows (Property Brothers, Flip or Flop, Rehab Addict, etc) which show you how people flip houses and make a huge profit out of a bad house. Truthfully, it’s not that easy.
Let’s see some tips and tricks for flipping houses:
1. Remember the magic number. 70% is the number you should keep in mind. This means that the costs with buying and rehabbing the house should not reach more than 70% of the ARV (after repair value) of the house. If it does, you are setting yourself up for a failure and your investors will not have any faith in your project.
2. Stick to the perfect deal. Make your plans well ahead and stick to the numbers. If you want to sell a particular house for a certain value, stick to that. However, it’s important not to set a price that does not respect the market rules; otherwise you may end up not selling anything after all.
3. Research the market. Keep in mind that it’s important to guide yourself following the local market. This is the niche you have to work with, so you have to be aware of what’s going on there. Do your homework and make some research. Check out the prices, their fluctuations and how does the market evolve.
4. Think about the buyers. Imagine who your target audience is and who would love to buy that house. If you plan it to be a family house, then you should choose improvements that are suitable for a family: sturdy doorknobs, safe additions etc. If it’s a smaller home, maybe it would be of interest for young couples. By doing this you will be one step ahead of the buyers in the area. Moreover, keep in mind that it’s not important what you like, but what they like.
5. Show Off with Your Work. Make a list of what improvements you made. This is going to be useful for agents, buyers, inspectors and other appraisers. It’s important to inform them about the initial state of the house and how you managed to improve all that. It would also be useful to have some photos so that they can picture it better. After all, it’s your work and this will help you sell the house, so why not brag about it?
All in all, these are just 5 common sense tips will help you know a little more about flipping houses. However, keep in mind there are also some other things to take account of.
