May 8, 2019 | Tips, Tricks and Member Safety. Share this article:
Everything You Need to Know About Flipping Houses
Flipping houses is an investment concept that involves purchasing a rundown home at the lowest possible price, spending the necessary time and money to fix it up, and then selling it for profit. Flipping, or rehabbing homes, has become the primary source of income for thousands of people across the country.
Are you thinking of launching your own home-flipping business? Read on to learn more about rehabbing properties for profit so you can make an informed decision.
Is it a good time to flip houses?
2019 is an excellent time to flip homes. The robust economy and falling mortgage rates are predicted to cause home prices to rise this year. This means rehabbers can make a bigger profit off each flip.
Before you get started
If you think house-flipping may be for you, ask yourself:
- How is my credit? Unless you’re paying for each house in cash, you’ll want to make sure you have a decent credit score to get the lowest possible rate on a mortgage or loan.
- Can I afford the down payment? You’ll need to have a large sum of cash available for your first down payment.
- Can I handle a delay or a loss? Flipping homes can be risky. Be emotionally and financially prepared for unpleasant surprises.
5 Steps to Starting a House-Flipping Business
Follow these steps to get your business up and running!
Step 1: Create a business plan
Outline your goals, delineate the number of projects you can manage in a year, create timelines for each project, build a marketing strategy and determine a financing source for your business.
Step 2: Acquire financing
COPFCU offers personal and business loans, as well as Mortgage Financing options. A HELOC is ideal for ongoing or longer-term projects. A COPFCU loan officer can review the options that work best for you.
Step 3: Find the right group of professionals
Spend time finding the right group of professionals to rehab your home. Also seek counsel from attorneys and others who are well-versed in local laws to make sure your house is up to code.
Step 4: Find your property
Experts predict that the best investment opportunities of the 2019 housing market will be found in the suburbs, and specifically in emerging new neighborhoods.
You can find properties at auctions, on sites like Zillow and Realtor.com or by scouting For Sale signs. Have a licensed inspector check any potential home before you close.
Step 5: Buy, rehab, market and flip
Have your team of professionals prepared to begin their work as soon as the home is yours. During this time, check up on your workers’ progress. When the rehab is nearing completion, start marketing the home. With any luck, you’ll find a buyer quickly and the home will, once again, change owners.
If you’re ready to start your own home-flipping business, call or visit a branch to speak with a Loan Officer about financing options today!