The house flipping process can be divided into three phrases: home buying, home renovating and home selling. Each phase is important and unique and each phase will build off the successes and failures of the previous sentences.
Phase One: Home Buying
This phase is the most important phase because it will set the tone for the rest of your house flipping project. If you select the wrong house to flip, you will be forced to pay higher than expected construction costs and forced to deal with a longer than anticipated selling period. On the flip side, if you choose the right house, the construction and selling process will actually take care of themselves.
Most real estate experts agree that you do not make money with the sale of your flipped house, but with the purchase of the house. You always want to have the end in mind. The end in house flipping would be to make money. Therefore, selecting the right house to fit your budget and your schedule means you will have a very easy time renovating and selling the house.
Phase Two: Home Renovation
The best strategy to follow to ensure a successful house flip is to set your budget and your schedule before you begin construction. With a budget and schedule set, you will know how much money you can spend for your flip as well as how long the flip will take. That way you can better track your progress.
In construction, the 3 most important factors to produce a final product are time, money and quality. All 3 of these factors are interrelated. For example, if you want to speed up the construction process, it is going to cost you more money and the quality of the work will be affected, most likely negatively. If you are looking to install the finest quality features in your house, it will probably cost you more time and more money. Finally, if you want to spend the least amount of money as possible, expect the quality to suffer and the duration of the project to last longer.
Phase Three: Home Selling
Depending on how well you researched your target market and what type of improvements you added to your flip in the previous phases, the home selling phase should only last a few weeks. Anything longer than a month and you will be forced to pay an additional mortgage payment which will reduce your overall profits.
To make sure that you sell the flipped house quickly you should follow these 2 guides: set your selling price below the market value and market your home.
The name of the game in house flipping is speed and when you set the selling price of your house below the market average, potential home buyers will see the added benefits of your renovation versus your asking asking price and immediately see a tremendous value.
Also, the more potential home buyers you can have looking at your house, the more likely someone will like and extremely buy your flipped house. To increase foot traffic in your house, allowing a real estate agent to list your home on the Multiple Listing Service (MLS) will give even more real estate agents the opportunity to showcase your flipped house.
There is no one right way to flip a house. However, some ways are significantly better than others. What works for some projects may not work for others. Determine your budget and schedule and always have an end goal in mind from the beginning. If you can successfully do that, you are well on your way to a successful house flipping project.