If you’re thinking about getting into the fix-and-flip real estate game in the Santa Rosa Beach, Florida area, then the following pointers should help you get started. In every market there are some different variables as well as some fundamentals that remain constant. We are going to cover a few of each in the following paragraphs.
1) Fix-and-flip is not a get rich quick scheme
There are many TV shows on cable today that make flipping homes seem like a very simple and extremely lucrative business or hobby. This could not be further from the truth. There is nothing easy about a successful fix-and-flip. It takes knowledge, connections, hard work, and a little bit of luck for a successful house flip. One of the problems with some fix–and-flip investors in Santa Rosa Beach is they think that just because it’s beautiful and there are lots of investment properties, their place will sell quickly and for profit. Do not expect to be able to find a property being sold way below market value that’s going to be simple to bring up to standard and sell for a huge profit. There is more involved. But, if you do your homework and plan properly, you can make a very good living flipping homes or condos.
2) Work with a knowledgeable realtor
The Santa Rosa Beach, Florida real estate market has many different types of properties in a small geographic area. Within 2 miles you can find a $10 million beachfront mansion, a 20-year-old double wide, and a torn up 3-bedroom single family home with good bones ready to be fixed and flipped. Working with a knowledgeable local real estate agent is key. An excellent local realtor will know precisely what is for sale, what has sold, and what will likely be selling in the future. Your Santa Rosa Beach real estate agent can tell you how much they feel a property can sell for when fixed, and how long it should take to sell. They will be able to find properties for you that meet your criteria the day they hit the market. Many times, well-experienced realtors will also come across “pocket listings” that do not get listed on the MLS. Furthermore, realtors will know of listings before they hit the market and be able to relay this info directly to you. Do not underestimate how valuable a qualified and experienced real estate agent can be.
3) Understanding market trends and inventory
Just because you have found a quality realtor you like and trust, doesn’t mean you do not have to keep up with the real estate market yourself. At the least, you should have a good understanding of the current real estate inventory. This will also help you understand the market trends. It is not uncommon for an investor to flip properties in numerous markets. Therefore, it is extremely important to realize that though they are relatively close to each other, the Santa Rosa Beach real estate market is different from the Seaside Florida market. Knowing the best times of year to sell in your market will help you plan the best times to purchase. As you will see over and over, the more you read about the timing of flipping homes, owning the property for the shortest amount of time is crucial to your bottom line.
4) Have more than one good contractor
The reason you should have more than one contractor is simple. Every single day matters when doing a fix-and-flip. If you purchase your property and you are ready to get started on the “fix” portion and your one and only contractor is busy, you’re going to have a problem. It is possible for builders and contractors to be busy year-round, but they are likely to be swamped late winter and early spring because they’re getting ready for the busy season in Santa Rosa Beach, which is summertime. Just picture if your contractor is going to need weeks or months before he can start work on your project. This is why it’s crucial to have numerous relationships with contractors and subcontractors you can call on when needed. When a few days can take a big chunk of your profits out of your pocket, you need to have things planned out and have backup contingency plans.
5) Have a good hard money financing option
Now you have found a property, have a contractor (more than one) and are working with a qualified local realtor. However, there’s one more step missing. Without being able to pay cash yourself, you will need a loan. Typically, when you are doing a home flip, you get a different type of loan than when you’re purchasing your primary residence. What you need is a hard money loan or a fix-and-flip loan. You want to work with a lender that has been focusing on hard money loans for quite some time and processes many of them every year. The number one lender in the fix-and-flip space is Anchor Loans. Anchor has been lending for more than 20 years, funds over $1 billion to real estate entrepreneurs annually, and can fund loans within 5 to 10 days of borrower approval—even faster for a rush project.
In conclusion, you should be starting to get an idea of what it will take to get started and successfully complete a fix– and-flip. Although this article merely breaks the surface, these tips should stay relevant for as long as you are flipping homes. As was stated at the beginning of the article, some of these tips will help you get started, and some are fundamental. Ultimately, the two work side-by-side. Don’t forget things that you learn in the beginning and never get too smart to take advice from professionals about their niche.
Danny Margagliano is a Realtor and guest blogger and from https://destinpropertyexpert.com in the Emerald Coast of Florida, more specifically, South Walton Beach. If you are in the market for your first fix-and-flip, vacation home or retirement home in the Santa Rosa Beach area, you can reach Danny at 850-830-4747.