Real estate flipping remains one of the best real estate investment strategies if you have the time, skills, and capital. The average ROI on a house flip is a massive 27.5%, according to a report published on fool.com.
If you're getting ready to get into the flipping business, ensure you have the basics in place. With the right foundation, you can branch out and discover which flipping strategies fit you best. Discover a few fundamental flipping tips for Texas by reading this guide.
Plan, Set Goals, and Research
The best practice is to have a well-researched idea of how you're going to operate as a real estate flipper before buying your first property. Consider what kind of capital you have access to and see which types of properties fit into that budget. Your business plan doesn't have to be perfect; it just needs to outline your goals and serve as a guide to help you achieve them.
Have a Good Financing Plan
Most people think that real estate flipping happens exclusively on a cash basis. While this is a viable policy goal you can set for yourself, most first-timers will need to borrow money for at least a part of the property renovation.
If you're able to borrow against the property, then a hard money loan could be a great option for capital. The main priority here is to ensure that you know the repayment amounts (including fees) and that you can feasibly make those payments.
Find Dependable Contractors
Unless you have all the skills needed for a renovation, you'll need help from a few contractors. It's imperative that you find dependable contractors. In this context, dependable means three things:
- They don't cause or allow for excessive delays
- They communicate professionally
- They don't cut corners
Many house flippers opt for the cheapest contractors they can find and end up losing money on a flip. If you're not sure of the best contractors around, consult with real estate experts who have a network of trusted tradesmen.
Know the Market and What's In It
Consider the broader market when looking for an investment property. You'll want to find a version of a popular type of property that needs renovations. For example, if there are many houses for sale but no apartments, the market favors apartments.
One of the best flipping strategies is to make additional improvements that the market likes. This makes the listing more attractive and increases your ROI.
Get the Right Partner to Help With Your Real Estate Flipping
If you stick to these basics, real estate flipping can become a lucrative part of your career in real estate investments. The golden rule is to avoid rushing. Take time to research and plan your steps before you take them.
Research the market you're considering entering to see which properties do best. Make sure that your financing plan can keep up with what that market and any possible renovations could demand. You'll also want to get hold of the best contractors to help you with the renovations (if you need them).
PMI North Dallas can be your one-stop shop for all the property-flipping advice you need. With over 30 years of property management experience in Dallas and North Texas, particularly in Plano, Frisco, McKinney, and Allen, TX, we fully understand the complexities of managing your assets.
Contact us today to get industry-leading service.
