Property Flipping Do's

There are several agreed upon Do's that can help make property flipping a success for you.  Below are several property flipping essentials that should be considered basics to a successful real estate investment.

Secure Real Estate Financing ahead of time:  Whether you take out a basic mortgage or borrow money from your 401k or arrange for investors have the financial aspects of your property flip worked out before you shop for property.  One of the key elements in flipping property is creating enough profit to make the investment worth your time and risk.  The best way to get your property at the lowest price is to have your financing in order for a quick and smooth close.

Develop partnerships with a good real estate attorney and real estate agent.  Before you begin your flip try and develop a working relationship with a realtor and attorney.  Explain to them your plan for your first flip and your future plans.  A good realtor is essential in helping you scout properties, as well as knowing what price range the real estate market is at the time so you can make offers on your property that are below market.  Remember your focus should always be on creating that profit window.

Develop partnerships with sub-contractors.  Keeping the rehab costs low should be another focus when flipping property but so should scheduling.  Nothing makes flipping smoother than a dedicated set of sub-contractors who will show up on time and perhaps perform last minute and short notice work.  Having a set of resources in place where you trust the quality and reliability can make flipping property much more manageable.

Mind your carrying costs.  Carrying costs include any expense related to the time you own the property, this usually includes your mortgage payment and any property taxes or insurance that might come due before you can resell the property.  When purchasing property for a investment you may want to work upcoming property taxes into your offer, especially if they come due during your rehab schedule.

Monitor the real estate market during your flip.  Real Estate markets change daily and weekly so the price you have in mind for your property going into the flip may need to change when it comes time to sell.  This is where the partnership with a realtor is essential.  If you have someone who can provide status on the market it can help you make decisions on how much to invest into the rehab and what to price the property when you sell your real estate investment.

Focus on taking the age out of your investment property.  Many pieces of real estate you might consider for a property flip are going to be older and require some renovation.  During the renovation of your real estate keep in mind that you want to update the decor.  As you replace countertops and tiles move the design of the property into the current times.  Nothing makes a property flip profitable than an holder house picked up cheaply and then brought into the year 2005 and beyond.  Additions like new tile and granite counter tops go along way in updating investment property.  Simple things like replacement toilets and cabinet handles also help take some of the datedness out of investment property.

Protect your investment during demolition.  If you have floors that only need minor attention by all means cover floors and walls during demolition to protect your real estate investment.

Time is money.  Remember that while you might be able to do many renovation tasks yourself, you only have so much time to turn over your flipped property.  Paying contractors to do more work than you planned might be cheaper than an extra mortgage payment or worse property taxes.