What To Look For When Flipping A House
What you look for when purchasing a home is entirely different when you are looking to flip it. While the typical buyer may be more concerned about if they can see the house being a place to raise a family, flippers look at it from a standpoint of pure profit. That is why you should look at these three things when you plan to flip a home.
The Comparable Nearby Homes
The first question you will have is how much money can you make from flipping the home. The best way to figure this out is to look at what similar homes in the neighborhood have sold for in the past couple of years.
You should try to find homes that have as many similarities as possible, especially when it comes to the construction material, square footage, and number of floors. It will be impossible to find the exact same type of home that has recently sold, but you'll be able to find one that is fairly close to it. You can use the selling price as a general idea of how much you can expect to make after the flip.
The List Price
You need to find a home that is cheap if you want to bring in a substantial profit to make the flip worth it. With a general idea of what a comparable home is worth after it has been fixed up, take a close look at that list price. If the comparable prices are already pretty close to what the sellers are asking, consider walking away or offering a much lower price. The worst thing that can happen is the seller rejects your offer and you make another one.
The time that the home has been on the market also plays a big part in how much you can offer the seller. A home recently listed may be harder to buy at a low price, especially if the seller is willing to wait and see what other offers come in. A home that has been listed for many months may have a seller that is willing to sell for a lower price.
The Home's Guts
Ignore cosmetic problems when looking at a home, since those can always be fixed. You need to look for homes to buy that are well built. Expensive items that need replacement, such as the home's roof, HVAC system, and plumbing will all cut into the profits. Since these are things that buyers cannot see, it's harder to get your expenses back, since buyers are focused more on the cosmetics of the home.
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