It seems like flipping homes has become one of America’s new favorite pastimes, due in no small part to the seemingly endless stream of reality TV shows that revolve around the endeavor. Needless to say, house flipping is not as easy as it may look. If you’re a new investor looking to try your hand at a flip, there are some questions you should consider before jumping in with both feet.
Do You Have A Good Team?
Flipping a house is hardly ever a one-person undertaking. Unless you’re a market expert, paying cash, proficient in construction, and a savvy negotiator…there’s probably more than one facet of a home flip that you will entrust to a professional. Building strong relationships with those individuals, or companies, who will play a role in your flip, can save you time and money. You don’t want to get halfway thru a remodel only to find out you chose the wrong contractor.
Is Your Timeline Reasonable?
A short turnaround time will help you keep costs like financing interest and property taxes to a minimum. On average, homes take about 180 days to flip, according to ATTOM Data Solutions. Don’t depend on averages though, after all, there’s no telling what you’ll find when you start tearing down walls. Be practical about your time to completion and always leave some wiggle room should the inevitable project delays arise.
Is It Too Risky?
All investments come with some inherent level of risk, home flips are no exception. The question you’re needing to ask yourself here is if the risk level is appropriate for your financial situation. Talk to a financial advisor, or an accountant, prior to planning your flip. It’s important to truly assess your risk tolerance. Depending on where you are financially, you may or may not be a good candidate for flipping houses.
Can You Plan Objectively?
While it may be tempting, the last thing you want to do is make home improvements and design decisions that reflect your personal tastes instead of what most home buyers want. Be prepared to choose home features and housing materials that are classic and offer wide appeal, even if you don’t personally like those features or materials.
Do You Have Financing In Place?
Obtaining a loan for a house flip isn’t like getting a conventional loan for a home you intend to live in. Most house flippers use a “fix-and-flip” loan that’s specifically designed for purchasing and remodeling homes. Here at CIVIC, we have several financing options for prospective home flippers. Give us a call at 877-472-4842, and we’d be happy to sit down and discuss those options with you.
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