Flipping Real Estate Houses

Prior to taking on your first rehab deal there are a few core areas that every rehab investor must know. You don’t need a degree or eight years of education to close your first deal. A majority of new real estate investors enter the business with rehabs and flips as their primary focus.

 

 

 

 

 

 Offer Price

purchase price starts the transaction and has a ripple down effect on everything else you do during the project. The purchase price is the starting point of any real estate transaction. Many new investors fail to recognize that the goal is not to simply get the offer accepted but to get it accepted at your price. The lower you get the purchase price for the higher the potential upside.

 Cost Of Repairs

In your work estimates you need to attach a price for the work, materials and labor associated. The total number you come up with will have an impact on the price you offer and hopefully the after repair value. You and your contractor need to walk the property and come up with a realistic set of improvements. The cost of repairs and the after repair value often go hand in hand. One of the ways to make money in house flipping is by adding value though improvements. Once your offer is accepted it is imperative that you and your team do everything in their power to stay under the number you budgeted.

 After Repair Value (ARV)

If you really wanted to you can probably find listings that are in line with the value you need to make the deal work. All you can do is study the market and find comparable that buyers will look at and not the ones that improve the value in your favor. The key to any successful rehab is estimating what impact your improvements will have on the property value. You need to be confident that the work you do will produce the number you expect even before you make an offer.

 Budget

If you took the time formulating a budget you are doing yourself a disservice if you don’t follow it. Going over budget causes you to compensate in other areas. Your bottom line very much depends on your ability to stay under budget. The amount of money you allocate for repairs is not just an arbitrary number you can be flexible with.

 List At Right Price

They have put hours of blood, sweat and tears into the property and think the market will feel their pain. Fair-Price provisions limit the range of prices a bidder can pay in two-tier offers.