The real estate market is always volatile. If you have ever kept up with it, you would know that current affairs greatly affect the prices of houses. If you are looking to invest in the real estate, it is important to know your facts.
On the other hand, it is a known fact that the best way to earn money in real estate is to flip houses. So what is house flipping? It is not a shame not to know about it because you can learn right here.
House flipping is the buying of houses which are under neglect for a certain reason. They can be under duress or under-priced due to foreclosure, auction, being the old or short sale. The idea is to buy such property and process to give them a makeover through renovations.
Now, it seems easy enough on the first glance because there is a fair amount of under-priced houses available on the market. However, one needs a certain amount of know how to determine which house is suitable for flipping.
Here are four tips to do appropriate house flipping and make a profit eventually:
The Flipping Formula
Firstly, it is important to understand what ARV is. ARV is the after repair price of the house you are going to buy and flip. The formula is that you buy a house at a price that is 70% of the ARV you have calculated. The price could be less than 70% as well but if you go above, you are sadly going to end up with no profit.
Learn About the Local Market
Now, it is very important to know what is happening on the global and national scale in the real estate market. However, the area in which you are looking to buy has more value. You must know what is happening here in order to make an informed decision about flipping the right house. You must ask questions like if prices are rising, type of neighborhood, schools, and demographics in the local area.
After you have gathered sufficient knowledge about the market and prices, you must learn about the buyers you are considering. Once again, it is vital to know the local buyer. Why is it important to know the buyer, you ask? The buyer is important because you need to make renovations according to what you think the buyer would be looking for.
This is a very important tip. In real estate, you must not get greedy because the buyer is not blind and most of them do their homework. What you offer as your selling price must match the value of the property. If the price is not justified, it won’t take long for the buyer to determine that. The result is you holding onto a property on which you spent good money to renovate but without profit.
House flipping can be pretty profitable if you have the right knowledge and experience./house-flipping-2018-4-tips-help-turn-profit//wp-content/uploads/2016/10/old-house.jpg/wp-content/uploads/2016/10/old-house-168x133.jpgReal Estate