House flippers typically buy homes at a low price. These are homes that need updating so that they’ll look and feel good to potential new owners in 2018 and beyond. House flippers update homes so they can sell them for a decent profit.
What are some secrets of successful house flippers?
For starters, they buy homes at “the right price.” If, for example, they can find a home for $100,000, spend about $25,000 in improvements, and sell it for $150,000, they’ll make a nice profit. House flippers tend to have a budget and stick to it. They don’t overspend; they look for good bargains that can ultimately be sold at a profit.
Next, house flippers who do well often have access to cash and make accurate cost estimates. They’re detail-oriented and pay a lot of attention to “the numbers” to make sure the money they invest in a place doesn’t just disappear. House flippers want to know what they’re doing will add value to a house. That means “doing their homework” is a major key to success.
Thirdly, house flippers buy houses in “the right neighborhoods,” which are the ones where people want to move to in the next year or two. If it’s a dying neighborhood in a polluted, crime-ridden section of town, it’s best avoided, even if one has good intentions. If it’s in an “up-and-coming” neighborhood that’s “gentrifying,” it’s probably going to be a winner.
Also, when it comes to making positive home improvements that will help the flipped house sell for a profit, house flippers either do the “fix-it” jobs themselves (to save money) and/or hire good, reliable contractors. In every town there are several people who call themselves contractors. Some are great and others are terrible. Reputation is everything in that business, so smart house flippers always want to work with those who’ve earned stellar reputations and have the great references to back up their resume.
Finally, successful house flippers don’t go out of control with the places they buy– they improve them just enough to make them nicer and to make a profit. They don’t “overimprove.” Oftentimes, flippers add special touches that don’t cost much, but nonetheless look great and help convince people to buy the place– crown molding, a new front door, or whimsical, trendy lighting fixtures can impress people and they don’t cost “that much.”