In house flipping, the most important thing to remember is to purchase houses at a cost below the market value.
Realizing Profit at Purchase
Though you may not immediately hold the cash in your hands, what can make or break your profit margin is your purchase price. If you buy low enough, then selling the house will be that much easier.
One of the best ways to buy low is to purchase properties that need renovating. A house in Utah that requires water removal will have a much lower price than one that needs fewer repairs.
Inspecting All Properties
It is foolhardy in real estate to skip inspecting the property. If you are buying a water damaged house, however, do not do it by yourself unless you are an expert in this field. Water damage can lurk in hidden places of the home that casual inspections will not reveal.
Enlisting the help of a professional may entail extra fees, but it will give you a better idea how much it will cost to get the house in salable condition. You can even use this figure to negotiate with the seller.
If you are buying bank foreclosed properties, you cannot skip a visual inspection especially since such properties are sold on an AS IS basis. Nothing quite throws off the budget like an unexpected need to replace most of the wood or even the roof of the property.
Putting Everything on Paper
To ensure a smooth transaction, make sure that the resulting contract has everything agreed upon in it. This goes for the sale agreement as well as the contractor’s agreement on how much it will cost to have the house repaired.
Property with a history of water damage typically will require higher insurance premiums. Done well, your renovation and repairs should ensure that such water damage is unlikely to recur, allowing you to argue for lower rates.
Knowing Where to Turn
Particularly for these types of properties, it’s important to know who to consult. Include in your list of contractors specialists in different fields, and you can confidently earn from purchasing distressed properties.