If you are a fan of HGTV you already know what the term “flipping houses” means. Flipping houses is the process of buying a property below the market price and then quickly selling it at a higher value which is possible by the changes you make to the house to increase its value. However, the process is not as easy as it sounds. There are a number of things to be considered and not everyone can earn a profit by flipping houses.
So, before you decide to become a house flipper make sure you do thorough research and know exactly what is involved in the complete process. In this article, we discuss the process of flipping a house in detail.
Process of Flipping a House
Step 1: Financial Status
The first step of flipping a house involves you reflecting on your financial situation. This is because buying a house will require you to have enough cash to make the down payment. So make sure before you get involved in the process you have a clear idea about how you will manage all the financial obligations. Make sure you include all the payments that might occur throughout the process.
Step 2: Commitment
Flipping a house is a process that requires you to show great commitment to the work involved. Even if you decide to get help from other agents and rehab workers it is important to monitor the whole process. Make sure at the beginning of the project that you will be able to give the attention and time that the process deserves. If you do not want help from a realtor and will show the house yourself to potential buyers you will require more time and efforts on your own.
Step 3: Find the Right Deal
The next step is to then start hunting for the right property for the right amount. You can use help from a realtor or other people for this or can do it on your own. Regardless of what you decide, this step is going to be a difficult one and might take time. When looking for the right home, in addition to the low market price also look for houses that will require the least number of repair services. This is because a house that requires a lot of work will result in you not being able to earn a lot of profit and will take a sufficient amount of time. You need to look for something that can be transformed into something valuable.
Step 4: Obtain Financing and Remove Conditions
After you have decided on the right home it is time to take out a loan for your purchase. Having a good credit history can help you significantly when taking out a loan. After you take out the loan and the purchase has been made you should remove the conditions and take possession of the house.
Step 5: Rehabilitation Process
Hire a professional in order to look after the complete process of rehabilitation if you are not able to do it on your own. This is because supervising the complete process is essential if you wish to follow the budget that you made at the beginning of the process. Try to complete the rehabilitation work as soon as possible. If you are planning to make some changes in the structure of the house make sure you have the necessary permits.
Step 6: Listing Property on the Market
Once you are done with all the repair work for your home you are ready to show the house to potential buyers. You can also choose to opt for the help of a realtor in order to find potential buyers or you can find buyers on your own. Make sure the house is in a perfect condition before the potential buyers step in. When negotiating keep a margin that is considerably higher so that you can sell the house at a price that results in profit.