Everyone has heard the hype on flipping houses, but few know everything that is involved with the process. Aside from researching and finding the best investment mortgage lenders, one should be somewhat familiar with the process. There were over 327,000 repossessions in the year 2014 alone, meaning the opportunity to embark on this vast market is plentiful. The average sale price of a home in 2016 was $186,000, meaning you should have as much information as possible before asking investment mortgage brokers for lending options. Read these successful tips for first time home flippers, or those interested in getting into the business.
Know Your Plan
Having a plan is important in any business venture. If you don’t have a solid plan then you can’t expect to get lending from investment mortgage lenders. They must know that lending you money on commercial property investing, or residential property investing will be beneficial. You must decide your reasons to invest in commercial real estate or residential real estate, and how you expect to turn a return on that investment. There are dozens of questions you should answer, and you should be familiar with commercial real estate investing before you begin. Commercial and real estate investment lenders don’t like to take chances, so your job is to show them they are not taking a chance on you, but rather investing in you.
Know What is Worth Your Time
You should not consider all renovations equal because they are not. Thousands of dollars spent on repairs and upgrades means nothing if buyers are not interested. You should research and invest time to consider which upgrades are worth the money and time and which ones are not. Doing your research and homework saves you time and money in the long run. When researching also make sure to check out cheaper easier renovations which bring in more value. Things such as door knobs, sinks, paint and light fixtures are easy and cheap fixes which really appeal to home buyers.
Know What Work is Involved
Know what all is involved in the renovation process. Who will you hire to gut the house should that need to be done? How many team members will there be and what will their jobs be? Will some strictly gut the property while others are responsible for clean-up? Will a dumpster be necessary, and how long will it be needed. The debris of the house need to be cleared away and you should have a solid plan laid out to handle this.
When looking at investment mortgage lenders consider that majority of hard money loans are required to be backed by as much as 50% equity to protect the investor. Do your research and gather all information before jumping in head first. The home flipping business can be a great success, but only If you have general knowledge of the concept and research your best options.