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      • SELL PROCESS
      • FINANCIAL PREP
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      • GINA BACA
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  • Home
  • BUY
    • BUY PROCESS
    • CREDIT & LENDERS
    • AGENT | SHOP | CLOSE
  • SELL
    • SELL PROCESS
    • FINANCIAL PREP
    • HOME PREP
    • AGENT | CLOSE
  • BUILD
    • BUILD PROCESS
    • NEW CONSTRUCTION
  • INVEST
    • INVEST OPTIONS
    • RENT VS BUY
    • SHORT TERM
    • LONG TERM
  • BLOG
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  • ABOUT
    • GINA BACA
    • WEICHERT TEAM
    • OLD TOWN
    • ALEXANDRIA HOUSE
3 - 4 MONTH TURN AROUND TIME

FIX TO FLIP

Purchasing a revenue-generating asset to sell quickly for a profit needs a plan, a strict timeline, and a budget, to be profitable. Home flipping can be a lucrative way to earn great returns, and flip those returns back into - well, flipping more houses.  


You can't just buy cheap property, upgrade all of the usual suspects (kitchen, flooring, and bathrooms), and expect to reap huge profits. You need to study the market, find out what types of homes people are looking for, and find a property that you can turn into that "ideal" home. 

WHAT TO EXPECT

Before anything else, you'll need to decide how much you can spend on your flip which includes the price of the property. 


  • Repairs and upgrades. How much do you have to spend on fixes? What can you do yourself, and what will you need to hire a professional for? 
  • Carrying costs. Consider what recurring costs you'll have to absorb while you own the home. That can include a mortgage, homeowners insurance, property taxes, homeowners association fees and utilities,
  • Closing costs. Even if you're paying cash or buying at auction, there will be fees. 
  • Your team. This includes tradespeople, a real estate attorney and a Realtor.


If you're using sweat equity and doing the work yourself, you may want to consider the value of your time. How many nights and weekends are you willing to give up for your flip?


THE UPSIDE

The most obvious benefit of flipping houses is instant gratification. Rather than having to wait years to pay off the property and reap all the profits from your monthly rent check, you can enjoy immediate gains when flipping a house. And unlike the stock market which can change in the blink of an eye, real estate markets are predictable. Overall, flipping is considered a lower risk investment strategy.


THE DOWNSIDE

But there are considerable costs that come with flipping a home. Distressed properties, the types of properties that are ideal for flipping, may come at a lower upfront cost than, say, a brand new home. But repairs may require a significant investment, depending on the state of the home. Transaction costs can be high on both the buying and selling end, which is something all investors need to consider. Another important thing to consider: the market itself.

FLIPPING IS STILL PROFITABLE 

You may walk away with a little less than this, but this figure is still an impressive return nonetheless. Many people who are professional flippers say they make at least $25,000 profit on the homes they flip - and some make as much as $100,000 on certain properties.


If you're looking for a quick return and have the means to flip several homes throughout the year, you can make substantial profits from your investments. 


It's possible to flip 10 properties in a year, and taking home $300,000. That's a return that's hard to beat with most other investment vehicles. But you need the time and resources to pull off so many flips in a year. Still, earning even just $30,000 off one flip in a year is nothing to sneeze at. 

Find out more

FLIP PROCESS

Find A Flipping Market - But when you're trying to make a profit buying and selling real estate, location could make the difference between a tidy sum and a big regret. A real estate agent who has experience working with investors can be helpful and may come in handy as a listing agent when it's time to sell. They'll know what's considered standard in a neighborhood, have the latest info on comparable sales. 

Build Your Team - You don't necessarily need to start hiring; just be sure you've got the number of a trustworthy electrician, plumber, HVAC technician and so on that you can call if needed. To maximize the profits on a house flip, you need to own the property for as short a time as possible. The sooner renovations can start, the closer you are to selling that home. If you need a general contractor schedule an appointment right away since they book jobs weeks, if not months, out. 

Secure Financing - Paying cash for a home flip can save on closing costs and interest. In early 2021, nearly 60% of flippers used cash, though it’s not always an option for first-timers. If you have home equity, a cash-out refinance or home equity loan could fund the purchase, though both carry risks. Alternatively, an investment property mortgage is an option but comes with stricter requirements and higher rates. Comparing rates from multiple lenders can help you secure the best terms. 

Purchase Property - Many house flippers use the 70% rule to determine the maximum they'll pay for a property. The idea is that you should pay no more than 70% of the value of the home after repairs, minus the cost of the work.  

Renovate Property - Sweat equity can help you get more cash out of the project, it's important to stay within the scope of your expertise. Shoddy repairs may get flagged in a home inspection or, worse, could trigger a lawsuit from your eventual buyers. As the home owner you can save quite a bit by getting the permit yourself instead of through your contractor. 


Market & List Home For Sale - Some house flippers choose for sale by owner, forgoing a listing agent (and their commission) in order to maximize profits. As with renovations, whether to go FSBO or work with a listing agent comes down to your priorities while selling without an agent will save you that 2.5%, it can also be time-consuming and you can miss out of buyers willing to pay more. It's better to have more options. 

WHAT TO CONSIDER

EXTERIOR

WALLS & WINDOWS

WALLS & WINDOWS

•  Replace missing fence boards

•  Add sod if needed

•  Mow the lawn and pull weeds 

•  Plant flowers to add color   

•  Fix or replace garage door

•  Service HVAC system 

•  Fix and roof leaks or tiles

WALLS & WINDOWS

WALLS & WINDOWS

WALLS & WINDOWS

•  Choose light and neutral colors 

•  Eggshell in the house

•  Semi-gloss in kitchen and baths

•  Remove wallpaper

•  Putty holes

•  Replace town screens

•  Clean windowsills & tracks 

KITCHEN

WALLS & WINDOWS

BATHROOM

•  Resurface or replace countertops

•  Service all appliances

•  Fix leaks

•  Clean out or replace tile grout 

•  Replace cabinet hardware

•  Tighten cabinet hinges

•  Paint or resurface cabinets

BATHROOM

LIGHTING & HARDWARE

BATHROOM

•  Fix leaks

•  Caulk and seal your bathtub

•  Tighten your toilet 

•  Replace toilet seat

•  Clean sink and tub drain

•  Clean out or replace tile grout

•  Replace broken cabinet hardware

LIGHTING & HARDWARE

LIGHTING & HARDWARE

LIGHTING & HARDWARE

•  Replace light bulbs

•  Fix broken lighting fixtures

•  Tighten doorknobs and hinges

•  Locate keys for all locks

•  Locate garage door opener

•  Replace batteries


FLOORING

LIGHTING & HARDWARE

LIGHTING & HARDWARE

•  Fix or replace broken tiles

•  Clean up or replace tile grout

•  Fix and clean baseboard

•  Restore hardwood floors

•  Professional clean carpets

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