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The house flipping market is hot right now, a perfect time to learn about house flipping for beginners. Many people make a living flipping houses, they have been at it for years. However, every house flipping investor started somewhere – as a beginner – Here are five tips for house flipping for beginners.
House Flipping Tip #1: Know How Much You Can Afford
Perhaps the biggest mistake new home flippers make is underestimating the cost associated with flipping a house. There are several unexpected costs associated with house flipping, including taxes, unexpected repair costs, and legal fees. It helps to price out your material costs, factor in any labor expenses and know what you need to sell the house in order to at least to turn the profit you require.
Many new house flipping beginners find it helpful to use a house flipping spreadsheet to factor all costs associated with flipping a house; these spreadsheets also are useful to accurately figure out all costs (even those you don’t think about as a new house flipper) in an organized way.
House Flipping Tip #2: Understand Your Local Housing Market
Understanding the local housing market will help you know what house flipping features will attract potential buyers to your area. Make sure you look at the neighborhood demographics, including the average age, education level, and income of people in the neighborhood. Take a look at the schools – are they good schools? Would you want your kids to go there? How about the job market in the area? Are there employment opportunities close by that will draw people with the income levels needed to purchase a flipped property?
All of this research will help you know the After Repair Value asking price of your flipped property. This information will also let you know how long you have to work on the property before you start eating into your potential profit.
House Flipping Tip #3: Understand Your Potential Home Buyer, Renovate to Fit Their Needs
Good schools in your neighborhood? The area will probably be a draw for younger families. Younger families means kids, kids require bedrooms, bathrooms, and open floor plans. Is this area in a neighborhood that attracts retirees? Retirees are looking for easy access, limited stairs, plenty of natural light, efficient and effective heat and or air conditioning, and nicely landscaped yards.
Make sure you draft your ideal buyer and flip the house to the specifications that would attract these potential buyers to your home.
House Flipping Tip #4: Show Off The Effort You Put Into The House
Flipping houses is a labor of love. Make sure you take before and after pictures of everything, so you can show it off to potential buyers. Make a complete list of every replacement item you added (or just add it to the house flipping spreadsheet mentioned earlier), include new appliances, new window, new fixtures, and keep all warranties in one central location. Show off your hard work and before and after photos to your potential buyers.
House Flipping Tip #5: Ask the Right Price for Your Flipped Property
You put a lot of blood, sweat, and tears into your first flip – it is understandable that you want top dollar for the property. However, it is important not to become emotionally attached to the property, remember – it is a business, your job is to make a profit – that is it. This is why I recommend using the house flipping software program to organize your costs and keep your eye on maximizing your profit margin.
As a house flipping professional, you will soon learn that every area has a maximum asking price for property. Ask more than that and you could find yourself sitting on the property and losing money. Ask less than market value, you could possible sell for less – or you might receive multiple offers that drives up the final sale price and adds more money to your profit margin.