Flipping homes is a popular real estate option for those who want a short-term investment. The process involves buying a home, renovating it to increase the property value, and then selling it for a significant return.
As simple as it seems, flipping properties isn’t as easy as countless reality television shows make it look. When you’re in the business of flipping, check out these important things to know when buying a house:
Crunch the numbers
Figuring out the right budget is an essential part of home flipping. The following are costs you need include in your budget:
- Acquisition costs
- Repairs
- Materials
- Building
- Decorating
- Holding costs
- Taxes
- Insurance
Having a realistic grasp of the overall outlay keeps you focused and clear-eyed. You don’t want to run the risk of overshooting your budget because you underestimated the time it would take and the subsequent costs needed to complete the project.
Also, figure out how much flipping you’d want to take on. Do you want to buy a rundown property and do a complete makeover? Or are you looking for a home that’s easier and less costly to renovate? Do your comps or comparative analysis of similar properties in the neighborhood indicate that the flip will be worth your while? Adjust your reno costs accordingly.
Plan your project
Once you’ve got a budget down, you need to create a practical timeline for your house flip. Your schedule should include when you expect to buy a house in Los Angeles all the way to when it will be ready for sale.
Your timeline should keep the project on track. Your goal should be to renovate and sell the house as quickly and efficiently as possible. Calculate the cost of delay on your bottomline. If the materials you ordered don’t arrive on time, you’ll still have to pay your construction crew. Learn ahead of time the local permits needed for a fix and flip because some of them can be time consuming.
Most projects get halted because they haven’t gotten the right permits. Check out the zoning laws of the neighborhood to make sure you comply with their requirements.
Work with a reputable real estate agent
Flipping a home requires a lot of real estate know-how. For a project like this to be successful, you need to do a lot of research and study the local market trends carefully. You need to know about the current houses in the area, like new developments in Los Angeles, if applicable.
Most home flippers usually have trouble getting a handle on the local real estate market. If you want ease and accuracy, enlist the help of a real estate agent. Working with a professional means having access to their resources and local expertise.
When choosing an agent to work with, look for someone who specializes in flipping properties. Also, find someone who’s had recent transactions in the area you’re investing in. Check their previous sales to see if they fit the bill.
If you’re thinking about flipping a home in the San Fernando Valley, get in touch with me, Arman Grigoryan. My experience ranges from developing homes to designing and staging them. I’ve been helping investors successfully flip properties since 2001. Call me today at 818.770.2777, or send an email to arman(at)armangrigoryan(dotted)com.
Find the right builders
Ask your real estate agent to recommend reputable builders for your project. The rehab team you choose is crucial for the timely and cost-efficient completion of your flip. Interview different contractors and compare their estimates. The ideal contractor is someone who can work within your budget and your proposed timeline.
Choose the right property
The best properties for flipping are those that need cosmetic enhancements only. Find homes that can be rehabilitated with low-cost improvements like a new coat of paint, new cabinets, better lighting, and better curb appeal. Temper your ambition when it comes to choosing a home to flip. Focus on properties that will give you the most bang for your buck.
After you’ve chosen a property, remember to get a home inspection. You need to make sure the home you buy doesn’t have any major problems. The majority of your budget should go to renovations and remodeling rather than fixing structural flaws.
Know what improvements to make
Tailor your improvements to your potential buyer. If you want to sell the home in Los Angeles luxury real estate, you need to add the appropriate upscale features. Luxury amenities include a spa bathroom, a gourmet kitchen, and a walk-in closet. Using high-end materials like marble and installing advanced smart home technology is a must.
Remember, make your home stand out while keeping it in line with other homes in the area. For example, if you’re selling in a Los Angeles neighborhood filled with contemporary homes, developing a traditional Victorian property would be unwise.