How To Fund Your Flip

 

Real estate investments are quite expensive. Not only will you need the money to buy the house you will be flipping but you will also need money for the renovations, repairs and remodeling that need to be made along the way. Unfortunately, the real estate business is very tricky and there aren't many traditional lenders that would be willing to go all out to support you in your real estate investment business venture.

This means you are going to have to either fund a good portion of the expenses yourself or you are going to have to find some other means of financing your house flip. First things first, the less you pay in interest the more money you bring home. You want to try to not max out all your credit cards trying to get profits from a property flip if it can be avoided. Merchant accounts aren't any better but they can help you to keep better track of exactly the amount of money you are spending on the flip and some will even give you 90 days same as cash (and this is a very good way of doing things if you can complete the process within 90 days).

It should be said that these aren't methods that are endorsed by the writer but they are definitely possibilities when it comes to funding your house flip. The best-case scenario is that you would have the money to play with and assume no real risk in the house flipping process but very few people trying to get started in real estate investing have that luxury.

That being said, one way that is probably to risky for most (especially if you are nearing retirement age) is to cash in your retirement funds. This is not attractive for many reasons not the least of which are the facts that there are hefty penalties for doing this and you are risking your retirement security. It is one of your options however if you are in a tight spot to find money for your flip. If your property flip is successful it will be water under the bridge, the money can be repaid to the lender or reinvested and the profit that came from the house flip can then be used to fund your next flip or other types of real estate investments.

If you talk about things carefully with your family and friends and you decide you are all willing to take the risk you can also use your home as collateral by taking out a second mortgage for the money. Again this is not the preferred method because the assumed risk is great for the security of your family. It is very important that everybody involved be made well aware that flipping property is a risky endeavor. Not only is it verr risky because you aren't experienced enough but the real estate market is also very picky. Your property could just sit on the market for several months which would incure costly carrying costs before it actually sells.

Forming a partnership is another way to share the risks and help lighten the burden when it comes to flipping houses. Keep in mind that this is a stressful business venture and should be treated as a business venture. For this reason a volatile or fledgling friendship may not be the best risk for a venture such as this. If you do choose a partnership you need to carefully discuss the type of financial and labor investment that is expected of each partner and the share of profit that each partner expects to receive as well. You should also consider carefully whether you are willing to risk the friendship for the sake of profits or would you rather go with a partnership that isn't a close friend (most real estate investment groups have people willing to help with the financial side and assume the risk for the lion's share of the profits).

Banks will typically fund a portion of the property costs if you can come up with an adequate down payment and show them a well thought out business plan. Do not rely on banks however if you have poor credit, lack a business plan, or do not have a sizable chunk of your own money to invest in the venture.

Please make sure you check out my real estate blog at http://cashmoneyhousebuyerblog.com

Boot Camp For Property Flipping

If you are anything like millions of Americans you have probably caught countless shows on cable television that boast the serious profits that can be made by flipping houses. This is a true statement, seriously big money can be made when one goes about flipping property the right way, however, big money can also be much more easily lost when a property flip goes the wrong way. If you are trying to find your fortune through real estate investing you need to pull yourself up by the bootstraps and understand a couple of property flipping basics.

The first thing you need to understand is that the biggest goal in a project such as this is to make as much money in as little time as possible. This means several things to the wise investor not the least of which is that you must always have a complete inspection performed before you make any sort of financial commitment to the house. A good inspection can help you identify work that must be done, whether or not there is any structural damage, or whether there are any unexpected problems such as signs of termites or water damage behind the walls.

These are very important things to know and should have a significant impact on your offer on the property as they will have a direct effect on how much you will need to invest in making the property sellable and whether or not the property will even be profitable when you consider how much money will be needed to get it in minimal selling condition and how much you can reasonably expect to sell the house for after that.

Once you have the inspection done it is a good idea to take into account all the things that will need to be done to improve the property and the things that must be done in order to get the property in sellable condition along with permits that are needed, inspections that are needed, and jobs that require licensed contractors in order to meet local code requirements. Each of these will take a big investment in order to complete and that should also reflect in your offering price.

Way to few would be property flippers manage to take in the big picture when making their plans and this is where most of them end up missing the bigger profits that can be made by successfully flipping properties for the lowest investment possible with the highest possible return on their money spent. When making your plans you will want to go with changes that are cost effective.

Avoid making structural improvements to the property unless you have a licensed contractor sign off on the wisdom and safety of those changes, as most of them can be very expensive as well as dangerous to the stability of the house. At the same time you should salvage as much as possible within the existing structure. Flooring and paint are almost always required in a house flip but you do not always need new cabinets in the kitchen or bathroom fixtures. Chances are that new doors and new hardware on the cabinets in the kitchen would be a great fix for old and tired cabinetry while make a drastic impact on the overall look of the kitchen without stealing some of your serious profits (cabinet doors cost way less than making new cabinets and so does paint and they can add the appearance of good cabinetry).

The biggest idea to walk away from house flip boot camp with is the idea that the most visual impact you can have on the home for the least amount of money the better. In other words you don't want to purchase a home that needs new heating or air conditioning as they are not visual changes and are quite expensive. Find a house to flip that needs minor cosmetic repairs and a little dose of style and imagination and you will be able to maximize your profit. That is what real estate investing is all about after all.

Please don't forget to check out my blog at http://cashmoneyhousebuyerblog.com

House Flipping Sob Stories

What you don't see on many of the television shows about flipping houses are the many sad tales of promising flips gone wrong. These legendary tales of misfortune are often the precursors to big financial hardships and for quite some time as those who do not succeed at their house flips work on trying to recover from their big losses and then moving on with their lives. Some are hit a little harder than others but the snowball effect of a bad property flip is often not even hinted about on the television shows that are so proud of the many success stories that arise because of hard and studious efforts in the property flipping area.

If you are planning to flip a house for a real estate investment you really need to take a step back and decide that you are absolutely not going to be one of the house flip sob stories that are rumored about in Internet chat rooms. In fact, you will definitely want to be listed among the other success stories. Unfortunately that takes a great deal of proper planning that is almost never shown on these television shows. In fact, to put forth your best effort you need to devote as much time to studying and planning properties, prices, and home values in your area before you even begin to search for your first property to flip as you need to invest in the entire process of actually working on your first flip. In other words, several months worth of planning and research need to go into your first house pick in order to lower the risk of not succeeding and to raise the odds of success.

The second thing you need to do when planning your first flip and avoiding a sad tale and a sob story is to be realistic and avoid great expectations. With your first flip you are darned lucky to turn a profit at all. If you are expecting to make more money on your first flip than you made last year as a full time employee you might need to make other plans. Because of all the unforseen problems, the first property flip very rarely goes as expected.

Third, you will need to put back at least twice as much money (or even three times as much) as you think you will need for the improvements on the property in order to cover the actual costs that you will incure. There are inevitably tools, permits, supplies, and labor that wasn't counted on in the initial budget figures as well as the tendency to seriously underestimate the cost of the materials that will be needed in order to get the job done. If you don't have that much or can't spend that much and walk away without a loss then the property you are considering might not be the best property for your first flip.

Finally you need to plan everything. Every day will need to be planned before you show up and try to work on the house and you will need to have all the materials and supplies you will need on hand such as coffee, lunch, drinks, tools and supplies. Trips to the hardware store, lunch breaks, and coffee runs quickly kill a day and any productivity that may have been made during that day. Avoid these costly delays by proper planning and you will discover that you have a real estate investing success story worth writing home about.

Please make sure to check out my real estate blog at http://cashmoneyhousebuyerblog.com

The Benefits of Flipping Houses

Aside from the obvious financial rewards that go along with real estate investing and flipping houses there are a few more abstract benefits that can be gained when you embark on a house flipping adventure if you are looking for a little more incentive to get going in the direction of your dreams of real estate riches through flipping houses.

Many things in life have way more than 1 pro or 1 con to them and the same is said when it comes to flipping houses. Whether you are doing this for a living or this is a one-time deal you will find that there are all kinds of little lessons you learn along the way. Knowledge is rarely a bad thing and the lessons you learn while flipping houses are lessons that can be applied in many aspects of your life.

1) Budgeting. There are few things that can give you a crash course in budgeting quicker than flipping a house. In order to successfully flip the house you are working on you will need to learn to budget quickly or you will wind up literally hemorrhaging money. Learning to set a budget and stick with it are both necessary skills for any flipping houses but when they carry over into other real life applications you will find that this is a very useful skill that has you looking at everyday purchases with new eyes.
2) Muscle Definition. Who knew that flipping houses would be such an excellent workout? This is especially true for those who traditionally hold jobs that aren't necessarily dependent upon physical labor and those that do much of the work themselves (which is highly recommended when you can in order to save expensive and profit eating labor costs). From heavy lifting to hammering and several other physical jobs in between you should discover that your labors are rewarded in more ways than simply watching your project come together.
3) Attention to Detail. This is a big advatage that comes from flipping houses and you can bet you will get better at this with every subsequent deal. The money, when flipping houses is often made in the small details that others will overlook such as new electric faceplates, proper staging, and a good eye for color throughout the property. These items make potential house buyers see a property that is loved and cared for rather than another house on their list of properties to see. If you pay attention to detail in your 9 to 5 job after flipping properties or into your tax preparing, event planning, and even organizing your home, you will find out that the experience you've gained while flipping properties is well worth the time, labor, and money that went into getting it.
4) Thinking Positive. You will hear it often in your life, but positive thinking is a very powerful tool. There are very few places that this holds true more than when it comes to flipping houses. You will definitely want to season your thinking positive with a BIG dose of reality but you should be well aware that thinking positive has many advantages to you when flipping houses and in almost every other area of your life. You don'tt want to spend your time that you could be repairing your property searching for problems or excuses+.
5) Just Do It. The old Nike commercials had a point and if flipping houses doesn't teach you anything else it should teach you this lesson. Procrastination wastes money. Every day that you carry the house you carry the expenses of the house (electric, mortgage, interest, etc.) get in there, get it done, and move on to the next project. Putting off the tasks that you don't want to do, won't make them go away so you might as well just go ahead and get them over with.

Flipping houses isn't rocket science but it does take a unique combination of luck, skills, and stubbornness to turn a profit in this particular business. Learning the lessons above will make you not only more successful when it comes to buying and selling properties but in other parts of your life as well.

Please don't forget to check out my blog at http://cashmoneyhousebuyerblog.com

5 Things To Do When Flipping Property

While many people have very specific dreams of enjoying the bountiful profits that can be made from flipping houses very few people put too terribly much thought into the process or any formulas that might be pertinent to success when it comes to flipping houses as a real estate investment venture or for the sake of building a nice comfortable lifestyle or retirement. You will hear a lot about the things not to do when it comes to flipping houses but very few people take the time to mention the things you absolutely must do in order to successfully flip a house and thus begin your ride on the road to real estate investment riches.

1) Do put everything on paper and plan it out very carefully before you begin. If you are going to enter into this to make money you need to treat it like a business. This means you must have a plan of action and you need to make every effort to work towards carrying out that plan.
2) Do establish a budget for the entire project. You must have a plan for the budget you are willing to spend on the property itself, how much for repairs, and how much profit you need to make in order to be a good investment for your time and labor. A house flip is a lot of work in order to pull it off successfully. You want to have a good idea of how much homes in the neighborhood are worth, the value of your property as is and the estimated value of the property once improvements are made. In addition you should also have a pretty firm grasp of the costs involved in making the repairs in order to create a realistic budget for the entire project.
3) Do have an inspection--It is a must!!. This is the single most important detail that can save you a great deal of time, money, and heartache when everything is said and done. Be prepared to walk away from the deal if the inspection determines that there is to much more work needing to be done than simple cosmetic repairs. You want to make visible changes that people can see because those are the changes that raise the value or the cost of the house. You want to avoid needing to make changes and improvements that aren't visible but are very necessary. If you need to invest a lot of money and labor into the house you need to seriously consider the realistic profit potential the property offers. If it isn't significant then you need to walk away before the property becomes a real estate investment money pit.
4) Do get to know the neighborhood and plan your deal according to the needs of the area, rather than considering your personal tastes and needs in a home. This is another thing that many first time flippers forget. This is not a personal project it is a business project and you need to treat it as such. Keep costs down and feelings out.
5) Do remember that you are in the market to make money not waste money when it comes to establishing an asking price for the property. You've poured blood, sweat, and probably more than a few tears into your flip but you cannot set the value of the property by the effort you've placed into it. Have realistic expectations of how much you stand to earn from your efforts and how much you are willing to go down on the price in order to walk away with some profit in your pocket.

You should take a moment to think about the fact that many first time property flippers actually lose money on their first deal. If you make money at all, even a small profit you learned many valuable lessons that you can carry onto future deals and make more profit. More importantly the lessons you learn from your first flip are lessons that money really cannot buy so it is worth a lower profit or even taking a slight hit if your experience makes you even more money in the future as you continue along your real estate investment path.

Please don't forget to check out my blog at http://cashmoneyhousebuyerblog.com