Real estate is an industry that enables you to make as much money as you can. There are various real estate investing strategies to choose from but one that is very popular is house flipping. It is a process where you purchase a rundown property, put cosmetic touches to it, and sell for profit. Your goal is to generate profit by selling the house as quickly as possible.
If you are new in the real estate business and you are looking for a sure way to make money, then house flipping is the best way to go. It enables you to make modest profits as long as you do it correctly. However, you have to be aware that just because the house is sold cheap does not necessarily mean that it is the best candidate for house flipping. You have to thoroughly check the structure of the house to make sure that the renovation process will not require that much money. If the house needs major work, then it could also mean needing a huge renovation budget and ample time to get all the job done. As you know, in the real estate business time is money. The more time you spend renovating the house, the more money it will cost you every single day.
How to maximize your profit?
For you to maximize your profit while doing house flipping deals, you have to know beforehand what particular areas to focus on. Check the property and see which areas need fixing up, how much money is needed to fix the property, and how long will it take to complete the house flipping process. You need to calculate the figures. You might not come up with the exact figure but at least close to the actual numbers. You could attend a real estate investing seminar. These two ladies found that a Scott Yancey event was an amazing and worthwhile experience.
House Flipping Spreadsheets and Worksheets
Another way to maximize profit is by using a valuable tool such as a spreadsheet for flipping a house which is also a great project manager. Professional house flippers will tell you that the general formula when doing house flipping is to shoot for a 30% margin. For example, if the total purchase and renovation cost is $80,000, then the selling price should be $110,000. This is the 70/30 rule. You get to make $30,000 profit for every real estate deal. Should you stick by it? Well, it depends on you. You might want to lower the price a bit so as to sell the property pretty fast. Some investors are willing to offer a bit lower price for as long as they can dispose the property quickly.