The Rules to Home Flipping are Simple….But Often Ignored
I get at least 50 calls each year from people who are thinking of investing in real estate and looking to flip homes. I talk most of them out of it, because they are not really ready to follow the rules, and I refuse to be the realtor who sells them a property that is bound to lose them money.
By following some very simple rules, you can be very successful at flipping homes, in almost any market, but the right home is hard to find. You must must must must must must must….did i mention MUST buy the home UNDER market value for its LOCATION & SIZE. This way, when you bring the home up to date with all your visions of glass tile and quartz counters, you have still left room for a profit for yourself.
Any professional contractor or realtor will tell you that you won’t get a dollar for dollar return on renovation upgrades. If you put $80,000 into a home, you haven’t automatically raised the home’s value by $80,000. If you’re lucky, you will average a 50-75% return depending on which upgrades you do. Too many people get too excited about their vision for a home, and downplay the harsh realities a buyer will show you.
So if you are thinking of flipping, my first advice is to work with a realtor who will be up front with you about home values and assessment. You need a professional to tell you if a home is really under market value, and enough to make your investment profitable. And if it is, I guarantee to you it will be sold before you ever see it on realtor.ca, often days after agents see it on their MLS. You need to be there the day it goes on the market if you stand any chance of buying it.
These homes dont come up every day, and you need to have the patience to wait for the right opportunity to invest your money. If you are too eager and emotional about it, you might bend the rules a little with the wrong house, because you just can’t wait to flip a home! This is a recipe for disaster and I caution you to step back. Take your time, do your research, factor in the cost of the right professionals to help you make the right choices and do the job properly. Then, you might actually be in the position to make a fabulous real estate investment.
If you need more info about buying or selling a property in the near future, contact me or visit my real estate website www.jeffoleary.ca