Making money flipping homes is the perfect opportunity if you have a knack for buying properties, renovating them, and selling them for a big payday. However, if you want to make money, it would be better if you have the right skills in real estate investing while at the same time partnering with a competent and experienced money lender like InstaLend. The InstaLend platform offers a wide range of services for real estate investors, including quick closings and low interest rates.
If you want to learn the right way to make money flipping homes, keep reading.
1. Understand the costs of flipping homes
There are so many factors that influence the amount of profit you will gain from flipping properties. Among these factors are the cost of repairs, taxes, and insurance. In order to preserve a good cash flow from operations, you must have the ability to add on expenses when necessary, but these expenses must not substantially affect your net profit.
Not all costs are tangible – intangible costs can be reflected as fluctuations in the market price of your property. Make sure to set aside a budget for contingencies when performing house renovations in case unexpected costs should arise, which is not uncommon.
2. Make your money on the buy
Savvy investors make their profits on the purchase of cheap or discounted properties with significant potential for upselling. Since a foreclosed property is much more likely to be undervalued and sold below its true market value, this presents a great opportunity for flipping.
Getting acquainted with the real estate market, performing market research, and partnering with a good lender will give you the upper hand when it comes to identifying the best opportunities available on the market. As a real estate investor, building strong relationships with realtors, wholesalers, and lenders will help you identify distressed properties listed for sale. In addition, scanning sites like Zillow is another great resource to help you find properties that have completed foreclosure and are ready to be sold.
3. Work with the right team
Surrounding yourself with a professional team of lenders and contractors will surely come in handy in case things go wrong with the rehab work or should there be surprises along the way. When things go wrong – and they surely will, you’ll know you have a knowledgeable group of people to lean on.
Having an experienced licensed contractor fixing the property will allow you to rest in peace should there be a problem with renovations or construction work. Additionally, good money lenders allow property flippers to benefit from institutional processes to monitor construction progress and property insurance.
4. Work with a reliable lending partner
Flipping homes requires money. Make sure you work with a reliable lending partner who can give you a loan for up to 90% of your project costs and close quickly. Most good deals have multiple offers, so the buyer needs to move fast to secure the property. For this reason, having a lender who can close in weeks, not months, is crucial. Moreover, lenders with a nationwide lending footprint can help you scale your business should you decide to expand to different states for flipping homes.
These are the factors that influence the amount of profit you will earn from flipping homes. Be sure to consider these before your next house flip to increase your likelihood of success.