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A flipper earned $72,375 on every home sale in 2024, registering a gross profit of 30.2%, on average. Since it only takes around 3 to 6 months to flip a house, it can help you bag big bucks in a short time.
House flipping can be stressful, but it does not have to be difficult. Learning about the right properties to invest in, regional trends and market factors can be particularly beneficial. With the right choices, house flipping can be an easy way to yield higher profits.
What Does It Mean To Flip A Home?
Flipping a home means buying a distressed house, renovating it, and selling it for a profit. Renovations include minor repairs to cosmetic upgrades, and modernizations. You can focus on adding modular kitchens, advanced security systems, etc.
After you fix the property, you can sell the house for a higher price than what you initially paid. Make sure to sell the house fast to reduce the holding costs. Consider selling it on online platforms like Houzeo, which can help you save thousands on agent commissions.
6 Steps To Start Flipping Houses
Here are the steps you need to take to flip a house:
Step 1: Assess Your Finances
Check your finances to know how much you can pay for a distressed house. Keep aside sufficient funds for renovations and repairs. Additionally, you may also have to take care of the holding costs until the property is sold.
Step 2: Find The Right Location
First-time home buyers with low budgets primarily look for house options in hot locations like Florida or California. Flipped houses on sale in these locations have higher chances to sell faster. Hence, find centrally located properties with accessible utilities like grocery shops, schools, and business parks.
Step 3: Shortlist Real Estate Agents And Contractors
Look for a contractor who will take care of plumbing, carpentry, electrical work, etc. Negotiate with them on their fees. Go through their work reviews online to be 100% sure to choose their services. You would also need a real estate expert to help you market the property.
Step 4: Draft A Renovation Plan
Inspect the house thoroughly with a contractor to understand the repair expenses. Also, ask him about the time frame associated with these fixes. Extensive repairs may take longer than a year.
Step 5: Stage The House
Just before your house is ready for the market, consult a professional home stager. They will guide you on how to declutter your house and arrange decor to attract potential buyers.
Step 6: Market The Property
Once the property is ready for sale, approach the real estate agent. They will help you list your house and attract potential home buyers. Create a plan to market your house, conduct showings, and for commissions – and stick to it.
How Long Does It Take To Flip A House?
A house flip takes anywhere from 3 to 6 months, depending on the following factors:
- Extensive Renovations: A major roof or plumbing damage would take longer to fix. Conversely, cosmetic fixes like painting or gardening can be fixed much faster.
- Market Conditions: Demand and supply, economic conditions, mortgage rates, etc. are all factors that influence how much time you might spend on the market searching for a buyer.
3 House Flipping Mistakes To Avoid
- No Flipping Plan: A first-time house flipper may fail to predict risks like a volatile market, falling home prices or pending rate hikes. To avoid this, you can create a detailed plan that includes budget, execution, and timeline.
- Insufficient Funds: You can avoid unexpected expenses in this renovation process with proper budgeting. However, you should have enough liquidity to cover unforeseen costs if and when they arise.
- Inspect the House Before Purchase: Hidden problems in a neglected property can blindside you and exhaust your funds. Consult an expert to assess the house before you buy. They can help uncover hidden issues.
Conclusion
House flipping is a rewarding journey, but requires a strategic approach. Research properties in neighborhoods with rising prices. Secure finances that you calculate would be enough to cover repairs and renovations. FInally, get a pre-purchase inspection and network with reliable contractors. Following these steps diligently will likely speed up your sale. Remember, the key here is to buy low, renovate smart, and sell fast. It can easily turn fixer-uppers into really profitable flips!
