Flipping properties can be a very successful real estate endeavor, but it's not always as idealistic as it seems on TV. No matter how experienced you are in real estate, it's important to learn about the specifics of flipping properties to make sure you get started successfully.
HOW TO FLIP A PROPERTY
LOCATING
Our experience flipping properties has shown that location is the number 1 factor to success. You have to find a property in an area that has at least one comparable property nearby that has sold for much more than what you are paying for the property. Chicago is unique as a place to find properties to flip because often there is a property nearby that will sell for $200K-$300K more than the property you are looking to flip. I can show you the areas where we have had success flipping properties. It is not essential that the school district be great or the area be especially popular, it just needs to be an area that is appreciated and people are looking to live in.
DESIGNING
Flipping works because there isn't an abundance of properties that have modern finishes.
Unless you have a lot of experience in house design, you should model your property after a similar comparable property that sold for what you hope to get for the property.
The worst mistake you can make is choosing the tile or finishes that appeal to you personally. You want to choose finishes that will make someone overpay for the property. Until you have done several flips, mirroring a similar property is essential.
Your contractor may push design ideas, but I encourage you to stick to the comparable property. It is unlikely your contractor knows what will draw people in and they might be looking for materials that are cheap or easier to work with.
Be humble enough to assume you do not know what appeals to a family looking for a new property. Based the design on comparable properties nearby.
FINANCING
You need money to buy properties and money to repair them before you make any money. Don't assume on your first flip that you will turn it over quickly. A good rule of thumb is to assume you will take 9 months on the first flip from the initial purchase until you sell. As you get better and better at flips you should be able to shave that time down to 6 months or less.
PREPARING
Flipping properties is complicated. You have to make lots of decisions quickly and many things will happen that are out of your control. You may plan to take a wall down and find out that all vents and running through the walls which will require you to move them all.
FLIPPING
Once you've rehabbed the property, my team will check in throughout the process to help you plan to put it on the market. We will take photos, create a floor plan, and start marketing as soon as it is ready for buyers. We can help you determine the right price to list the property that will produce the highest offer.
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