As a new real estate investor, you’re probably fresh on the heels of your first few transactions and feeling the waters for how the veterans have managed to be so successful in this lucrative business. Part of that may require research and testing the waters. Understanding market specifics and values – and targeting interested buyer groups – is just the start. Then there’s also the partnerships with contractors you trust and securing the money needed to obtain the property quickly.
One of the top ways investors are turning profit these days is with fix-and-flip homes. These are properties that are purchased for a low price, quickly made move-in ready, and then put back on the market for profit. Reports show this type of home selling for one-family homes is on the rise and is the highest it’s been since 2006! Now is definitely a great time to get in there!
- Don’t Buy Without Researching First
If you’re just getting started and want to ensure you’re doing fix and flip right, here are some top tips for new investors to consider:
One of the most important things to do when you’re first starting out is to understand what a good property and solid investment is. This can be unique for each location and market so it’s important to either get really familiar with the area you’re considering or take the time to check out the property itself. Things like the location should be investigated. Is this somewhere people are actually looking to buy a home? Have other similar properties sold recently in the area…and for what price?
- Keep Personal Preferences Out of the Equation
It’s too easy to choose things you think look good or are personally appealing to you. But remember, in the fix-and-flip game you’re not buying for yourself, you’re buying for others. Always go into an investment in the frame of mind of a buyer. What things do they actually need and want? If there’s a great low-priced property in an area no one is looking or wanting to move to, your chances of selling quickly and for a profit are much less.
- Invest Low So There’s Room for Profit
One of the biggest mistakes new investors make is paying too much for a fixer-upper property that they then need to also invest in fixing. By the time it’s time to sell there isn’t much meat left on the bone. To avoid this problem, only invest when the price is low enough and don’t go too crazy with the upgrades and renovations. Chances are the buyers will change things to their liking anyway so understand the most important things to fix and leave some wiggle room for any surprises.
Call Sachem Lending today! We’re specialists in the fix-and-flip loan business. We understand your goal of buying property at a discount and selling it for the highest profit you can get. That is why we can get you your fix-and-flip loan within days while not charging for a draw. Fill out an application today and see what Sachem Lending can do for you!