As fix & flip lenders, we follow the home flipping industry just like you do, and we recently came across a couple of timely lists that we thought were worth passing along.
The first one was “How to Flip a House: 7 Signs You’ll Rake in Huge Profits” from Realtor.com, and the second was “Top 5 Must Haves For Flipping Homes In NYC” on TGDaily.com.
So, how do you make huge profits with fix & flip financing? According to Margaret Heidenry, paying attention to these seven signs can make a big difference:
1) The property is in a neighborhood where homes sell fast (anything sooner than 62 days beats the national average).
2) The house meets the 70% rule (if you want to make 10-30% in profit, you need to acquire that home at 70% of the final after-repair-value price).
3) You can price the house right (hint: use median prices as a guide).
4) The property has more than one bedroom.
5) The needed repairs are mostly cosmetic.
6) Understand what scares home buyers (replacing old appliances and roofs for example).
7) The neighborhood itself doesn’t need flipping (people enjoy living there).
To read the full article with details on each of these factors, click here.
How about the importance of considering regional or local issues when looking to fix-and-flip properties, especially when taking out fix & flip loans? TGDaily.com highlights these five factors when flipping properties in New York City:
1) Have legal and tax advisers on hand that understand the complexity of property laws in New York.
2) It’s more practical in NYC to have your own handyman than to keep contacting a variety of local contractors to fix a home.
3) Select location wisely (be sure the neighborhood has what target buyers want).
4) Estimate material costs accurately (just knowing the value of land in NYC is not enough).
5) Be patient (so you don’t pay too much, too soon, too often).
For more information on each of these considerations, click here.
In summary, neighborhoods matter, price matters, the home itself matters, timing matters, and laws and taxes matter. If you’re in the market for flip financing, paying attention to these and other details can help quickly turn flipping problems into flipping profits for your business.