Making a profit on a fix-and-flip investment requires that a lot of things get done right the first time, and that includes qualifying the property you want to buy. Anchor Loans is ready to finance your next fix and flip property as the nation’s top lender.
When qualifying a potential home for a re-hap, consider these three criteria:
* Is the property in my target neighborhood?
* Is it in satisfactory condition?
* Is it an outlier in any way?
Let’s look at each in a bit more detail to ensure you get the best outcome from your financed flip.
First of all, if you don’t have a target neighborhood that you focus on then your results are likely to be as random as the places you look. Having a target neighborhood allows you to build up a level of expertise, contacts, and that “keen eye” that gives you the edge you need to make money or out maneuver potential bidders. So be sure the property under consideration is in your personal neighborhood “zone of competence.”
Also make sure that neighborhood isn’t twenty miles from where you work or live. Sure, maybe you “used to know” the neighborhood. But if you don’t go there much anymore, someone who does will beat you to the best deals.
Look for quick and obvious negating factors to eliminate a fix-and-flip candidate. These include (but aren’t limited to) things like fire and/or water damage, lead paint or asbestos, foundation or termite problems, and aluminum wiring or collapsed roof. Sure, you could fix these things.
But why take on that added challenge when your goal is to fix and flip that property quickly.
Avoid the Outlier.
People tend to gravitate a particular neighborhood because it conforms to a certain image or expectation. If you end up picking a property that falls outside that expectation, go ahead and add a few more months of carrying costs to that investment, because your property is likely to sell a lot more slowly. Ask yourself if that “great deal” is because there’s some sort of unusual architecture or lot configuration relative to other homes or the area. Or if it is because the house is too large or two small, or the inside layout is too different, or the street is a lot busier than most, or it’s the only house near power lines. Yes, being unique can add value to a painting or a piece of jewelry. But when it comes to quickly extracting profit on a fix-and-flip investment, stick to the local script.
Ready to finance your property with the nation’s top fix and flip lenders? Anchor Loans has funded more than 13,900 short-term loans totaling over $4 billion — the majority of them to borrowers with less than perfect credit and on properties in need of repair. Click here to apply for a loan or get a quick estimate.