Flipping is where you buy a property, refurbish it, and sell it to make income.
You will find that you may get financially or emotionally drained at times and if this happens you might be begging your old boss for a job again.
Here is the right and easy way to make money in 7 easy tips:
1. Expect to get a twenty percent return on the value
You should try to get that on the value, not on the amount you have invested. If you are expecting to get over the 30% mark then you could be looking at a best-case scenario. When you gross around 30 thousand dollars you should come out with about 15 to 20 thousand dollars net, depending on how much the refurb cost you. These are based on the purchase having happened at auction. In some cities, you could find the price is much higher.
2. Large Cities or Smaller Towns
If you are looking just outside of the city you can expect to see a price tag of about a hundred grand. You will want to say under the 1st stamp duty. You will want to see that if you buy at 90 to 120 thousand dollars it is a very good price point. Often when you look at London you will find the figures are better for sales, but it comes with a lot higher cost of risk. You will also notice that it is going to be harder to buy into the market, but that makes it easier to sell out of. In some of the other areas, you will find it easier to enter, but more difficult to exit. The only time that you get in between the easy entrance and exit is if you are in between seasons for sales when it comes to property flipping.
3. Be Pessimistic
When you are looking at the sales you need to make sure you are pessimistic about the investment as you could have a lot of factors you are unsure about. Some of these will take longer and some shorter than what you would expect. You just have to make sure you have a deal analyzer available to determine the best, likely, and worst case scenarios. If you cannot make over a 5% profit on your flips then you may want to walk away from the business.
4. The Rule Of 3
This is one that you will see that you are going to have in place because every 3 flips that you do you will have the case of getting a best, worst, and expected sale. Some people will fail because they get only the best deal each time. So for a 100K property you will find the best case is 30, likely is 15K and the worst is going to be 5K, so you will end up with an average of 35K on every 3 flips you get each time. That is actually a very good start on your first few 100K flips, but you will need to make sure you are realistic and not expect to have this type of a start right away. You will want to make sure you always flip in 3’s as this will allow you to find the biggest mistakes possible on the first flip and then change what does not work. If they did not work and were unrealistic expectations you will not be able to get the right feel. Once you have finally flipped your first 3 properties, you will start to see your next 3 will be quite a bit better. Often you will find that your best flip is the worst case scenario as you will learn the most in the shortest amount of time possible and this makes it a real flip.
5. Refurb To Sell
You will not want to cut the corners to make it into a rental, you will want to find out what the buyer wants and use this. The first time buyers are often the best in the world if they have the First Bank of Mum & Dad financing. So you will want to make sure you keep track of the details. You will want to check with the agent to see what is going to stick around and then you will be able to make money at a higher level with the sale than a rental.
So make sure you are refurbing to sell your flip property.
Why would the agent want to push your property? Why would they list it on paper and push people to the home? If you chip them on the fees they will not do that. So you will want to make sure you pay overboard on the fees. Just make sure you give and not argue. You will want to ethically reward the agent. You are either their favorite or someone else will be. This is something a lot of flippers move away from.
7. Get Good Deals
You will find that good deals is going to be a great thing to get involved with. You should never let a lack of funds stop you. You will find that a good deal often needs to be financed. The better the deal is, the lower the risk of the deal.
You will find that no matter what each area is different when it comes to flipping and some are good and some are not good.
If you need some more help, here are some great tips from AssetColumn.comWake up Right! Subscribe to our Morning Briefing and get the news delivered to your inbox before breakfast!