The rapid growth of the property market creates a lot of opportunities for those who want to invest in real estate. Aside from investing in real estate for long-term gain, you can also enter the buy-to-let market and buy properties for the purpose of renting them out.
Another great opportunity to explore in the property market is house flipping. More and more investors are taking house flipping as a way to make serious money, especially in today’s real estate market. To get started, here are a few important things you need to know.
House Flipping at Its Core
The idea behind house flipping is very simple. You buy a property at a low price, and then sell it for a profit. Depending on the property, you may need to do some repairs and add home improvements to boost the value of the property.
While the principle behind house flipping is simple, you still need to know the market very well and understand how to invest in the right properties to make a healthy profit. There is no point in going through the steps of flipping a house if you only make a small margin.
Top investors in this market already know how to spot the best opportunities from experience. As a beginner, you can substitute experience with plenty of research. That brings us to our next point, which is….
Some opportunities in the property market are easier to spot than the other. The Real Estate Owned (REO) market, for instance, is filled with foreclosed houses that the lenders could not sell. These properties are usually made available at lower prices, giving you plenty of room to make a profit.
The key to entering the REO market is fast execution. The REO property that you see today may not be available tomorrow, so you need to act quickly when you see the right property for your portfolio. This means securing quick financing from private money lenders for real estate and completing the purchase quickly.
Another interesting opportunity to explore is the foreclosed property market. Auctions are where you find great properties at bargain prices. The more auctions you participate in, the more properties you can potentially flip for a big margin.
The Business Plan
Just because house flipping is a straightforward business, doesn’t mean you should not have a business plan. As a matter of fact, a clear and concise business plan can make or break your real estate business.
You can start by setting clear goals and parameters. Figure out the target profit for each house you flip and define clearly the types of property, locations, and project timeline you are comfortable with flipping.
Lastly, do continuous reviews to measure the success of your new house flipping business. You may not score a big profit on your first property, but there are so many things to learn from the process. That is how you amass experience and become an expert in house flipping yourself.
Now that you have the basics covered, you can jump right in and explore the lively real estate market that we have today. Pick the right property to work on and flip it for a big margin.