Real estate investing is exciting, but fraught with dangers. Newbies often start with one home and gradually expand later.The first order of business is to secure a source of financing. First, research the private money lenders San Francisco home flippers like you depend on for liquidity.
Now, here are five other important things to keep in mind before taking the plunge into the markets.
How Much Will YourProperty Sell For?
It’s important to know the expected selling price so you can work backward and establish your budget for repairs and holding costs. Look at the going rates of other similar locations in the same area and consult with an experienced realtor.
What Repairs Do You Need?
Network with an experienced home inspector who can spot trouble with foundations, rot, and infestations.
Ideally, you will only need to perform cosmetic or surface upgrades to the property:
- Flooring – new carpets, refurbish hardwood, new tiles
- Paint – Interior or exterior to freshen up the colors
- Cabinetry – Readymade inserts improve storage in kitchens and bathrooms
Always use qualified contractors who perform quality work.
How Long Will the Repairs Take?
You need to get your property listed for sale right away. Every day you delay with renovations, is a day you must pay additional carrying costs.
Some new home flippers think that they can save money by doing the work themselves, but contractors are worth the expense in the long run. The professionals keep you on your schedule.
What Are My Carrying Costs?
Carrying costs include more than just the interest on your financing. Plan for association fees, utilities, and other unexpected expenses as well. Also, have a source of rental property loans available if you get stuck and need to reorganize.
How Does the Local Market Perform?
Have you looked at how quickly houses are selling in the neighborhood? Flipping a home for profit has as much to do with the velocity of transactions as it does with the profit margins. You might get a great sales price in the end, but more deals over time improves your return on investment.
We can help with investment property financing solutions. Contact our office today and ask about our fast-paced lending options.