How to Flip a House in 6 Months

April 15, 2010 | Posted by admin | 1 Commen(s)

The secret to profits in a property flip is quick turnover – the quicker the better. Otherwise, you wind up sitting on a property for several months, making mortgage payments that eat into those profits...and today, as the banks who received federal bailouts decree that the property values they played a large part in inflating should now be devalued, time is very much money.

Fortunately, there are some actions you can take that can enable you to resell the property within a six-month time-frame. This is especially useful in communities where a buyer is legally barred from re-selling the property before that time.

Plan Ahead

Keep in mind that property flipping isn't what it was during the halcyon days of a few years ago. Chances are that it will take you six months to find a suitable buyer, so go into the transaction with your eyes open.

First of all, crunch those numbers and be realistic about it. Property flipping is a business and doing business entails certain expenses. In this case, you're looking at:

• purchase price
• renovation and repair costs
• the carrying costs (six months of mortgage payments)
• marketing

That last item can be hefty. If you aren't inclined to hire a realtor to do this for you, it may be worth your while to go to real estate school and become a realtor yourself.

Undersell

Study the market and find out what similar properties are going for in your area. Set your initial price at 1% below that figure, but be prepared to go 2% if need be. The items discussed above should be your guide here, and need to be kept in mind before going into the deal.

Prepare to Be Flexible

If for some reason you cannot sell within six months, it is not necessarily a bad thing. Rental properties can provide a lower, but potentially steady stream of income. Some of those who start out to "flip" actually find it is more profitable in the long run to hold on to the property and rent it out.

Find a Mentor

Especially if you are just starting out, it is important to find someone who has "been there, done that" to act as a guide. Such a person can help you in avoiding the pitfalls that can cost you substantially and make maximize your chances to profit from a property flip. Use our resources here at NFAFN.com to connect with those who can show you the ropes in how to make maximum money in minimum time!