Finding a property that is below market value and requiring improvements in order to reach its highest potential, then making those improvements and selling to make a quick profit is the basic idea behind fixing and flipping homes. Don’t let the fact that a house is an ugly duckling stop you from exploring the hidden potential – this is a prime candidate for a flip and flip. It is amazing what a coat of fresh paint and wise color choices following home staging guidance can for the appearance of a property. However, margins are often tight on these deals so paying attention to the structural integrity and soundness of major systems, such as the HVAC, is crucial- don’t skip out on the inspection if you’re in doubt.
Whatever you do, your first step should be putting together a plan and following the tried and true formulas that have led many other investors just like you down the pathway to wealth and a comfortable retirement built on prudent real estate investments. Read on as we explore five great tips for fixing and flipping homes in Venice.
The old adage exists for a reason- location, location, location. Especially crucial in fixing and flipping, ensuring that there is demand in your market and that home values are trending in the right direction is a must. Finding the right property is our first tip for fixing and flipping homes in Venice. You must know the market to gain the most return on your investment dollar, as market information can change dramatically within a city, often even within the same zip code. Working within your budget, you’ll want to locate the lowest-priced property in the best possible neighborhood. Look for positive factors that will attract more buyers, such as parks, proximity to shopping, and the quality of schools. Another factor that you can use as a guide is the crime rate in the area.
Know your numbers
Calculating your rehab and holding costs may be the most important and most difficult of our tips for fixing and flipping homes in Venice. When developing your plan of action you must clearly understand what tasks you can handle yourself and where you need to bring a professional in – then collect quotes for all of the work that will be done. Walk through your rehab plan with an experienced contractor and make sure you are pulling all necessary permits and working up to code. If not, you may face significant additional costs needing to rip out your original work and start over again. Always be sure to buffer your rehab estimate at least 10-15% to allow for unexpected issues to arise. Along with the rehab costs, don’t forget about holding costs – paying any interest on loans during the rehab, keeping the lights and water on, mowing the lawn, etc. These can add up over the several months a rehab generally takes and cut into your profits when fixing and flipping in Venice.
With your end price in mind and rehab and holding costs calculated, you can determine what the correct purchase price will be. Our next tip for fixing and flipping homes in Venice is leaving enough room for profit after your work is complete. Real estate investors rely on market analysis or comparative market analysis (running “comps”) to determine the price they should pay for a property after deducting the expenses of fixing it up. This is based on the value of similar homes sold recently within the same area. A rough goal for real estate investors is to pay 70-75 percent of the After Repair Value (ARV) minus the costs of repairs or improvements. This generally leaves enough meat on the bones for the investor to make a profit.
Before exiting the deal, be sure to review all of your options for an exit strategy. Holding and renting the property before selling may be a powerful element to use as a part of your investment strategy with fixing and flipping homes in Venice. Savvy real estate investors can use the instant equity created in a property to leverage the purchase of other houses to fix and flip, all while earning a monthly income from their tenants. As a bonus, this work serves to improve neighborhoods and the community as a whole. In addition, as more homes undergo rehabilitation, the overall property values in the area rise, further increasing your equity, benefitting investors who choose to hold the property for a few years as a rental. Keep the property more than a year and you are also going to pay less tax when you do sell.
Lastly, our final tip for fixing and flipping homes in Venice is to setting an accurate sales price. With the increase of the internet and sites such as Zillow or Realtor.com, pricing your home correctly is more important today than ever. Overpriced homes on the market will linger because today’s buyers know how much they can purchase for their money and will just scroll by if the deal isn’t right. But, on the other hand, they will also skip your listing if the price seems too low, thinking there must be work involved, or a hidden problem, for the price to be so far below market value; most buyers are looking for a move-in-ready property. Another must of selling a property, after you’ve done the work to get it ready and paid for photography and marketing, you must communicate with buyers and make yourself available on a full-time basis for showings.
Are you interested in starting your fix and flip business? The pros at Maio Strand Property Group will take the time to listen to your questions and help you with any concerns you have about getting started. At Maio Strand Property Group, our experienced professional investors are happy to help you locate the right property, or you may find the perfect one among our current inventory of the best investment properties available in [market_cty] today. Let our full-service team at Maio Strand Property Group help you every step of the way, from purchase to sale, or do it all for you! We make fixing and flipping homes in Venice easy for investors, so why not find out how Maio Strand Property Group can help you? Contact Maio Strand Property Group at (631) 335-4055.