A Quick and Easy Guide to Successfully Flipping Real Estate
Inspections!
Know what you’re getting into before you buy. With a complete inspection you will be able to tell your contractor exactly what you need and want done to your flip.
Cosmetic work, not structural stranges.
For your first house pick one that needs only cosmetic work such as paint and new flooring. Cosmetic changes can also extend to new kitchens and bathrooms. Try to avoid houses that may be fire damages as these will most likely require structural repair, costing you much more time and money.
Get estimates.
Most contractors will give you an estimate for free. Get at least three estimates before you choose a contractor. This way you’ll get the most bang for your buck. Of course, contractors are one of those tricky situations where extra money may or may not mean better quality. Check with the Better Business Bureau before hiring anyone. You can also consult AngiesList.com.
Over budget, over schedule, under sell.
Allow yourself more money than you think you need, more time than you think you need, and always under estimate how much you can sell your flip for. This way, you won’t have too many surprises.
No credit cards!
Don’t use credit cards to finance your remodel. The interest rates on credit cards will almost always be higher than any bank loan. You’ll be much better off getting a loan or a flexible line of credit from your bank.
Get a dumpster!
Nothing is harder than picking up miscellaneous pieces of trash after you’ve finished your remodeling. Clean up as you go along and it will be much easier at the end.
Permits!
Make sure you get all the appropriate building permits. Otherwise you could end up with some serious fines and delays, causing you to do over budget and over schedule.
Repairs list!
Make an exact list of everything you want done on your flip. Be very specific, right down to the specific paint brands and colors. This way there is no confusion and no mix-ups.
Daily appearances!
Make daily appearances at the jobsite. There’s nothing worse than being gone for a week and coming back to find that your contractor ditched you that week for another more profitable job. I suggest going early in the morning to make sure your contractors and their employees are there on time and just before the end of the day to ensure they don’t leave before the work day is done.
Tax preparation.
After you’ve done all your remodeling and you’ve made your profit on the house, sock away a couple thousand dollars to save for tax purposes. Otherwise, it will be a huge kick in the pants when that tax bill comes.
