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The fix and flip house business – Few essential points to consider
1 Nov 2019
fix and flip house business guide
The house flip business has a flourishing future! The process involves an investor buying a house and selling it within a very short time with an increased price.
For several real estate lenders, the phrase “short time” indicates any residential property that gets bought and sold, mostly within a year. And just in case you need more than a year to complete the property work, you can get in touch with lenders who provide the financing solutions as well.
The three types of flips
Generally, there are three categories of the flip.
- Wholesaling a real estate property happens in three ways. You have the choice to assign the buying contract, and you can sell it through double escrow. Alternatively, you can buy and sell it fast without remodeling a property.
- You can buy a property by cleaning up the property as a whole. After that, you can place it back on MLS (Multiple Listing Services) for selling it to an investor and end-user.
- Flipping and fixing as the investor buys a real estate property for adding value. After that, they list it on the MLS and sell it to the end-user.
Leveraging the business opportunities
Have you thought of maximizing these business scopes? Also, have you figured out what to do with your money, when the real estate property takes time to sell? The solution is simple! For leveraging your success, it is essential to buy correctly. Also, purchase correct indicates buying at a cost that will enable you to re-sell below or at the market value and generate profit.
Also, if you want to succeed with a fix and flip process, you need to set a realistic budget for remodeling the house. You must stick to the budget, as well. Another critical point you should keep in mind is that when you are coming up with a smart real estate investment plan, price the property rightly for it to sell well and promptly.
When the flip house property takes time to sell, it costs on the investors in any of the three ways discussed below:
- An interest carry
It is the monthly expense borrowed for several projects. In this process, you need to assume that the investor owes a loan on the real estate property.
- The opportunity expense
It is the expense of not shelling your capital and then invests it in various other projects. For instance, if the property has a high price and doesn’t sell, then the investor can miss on a chance to buy additional investment properties.
- The capital expenses
It is the expense that the investor should pay for the capital they invested in their project. The amount gets based on the return type an investor can have when they spend money elsewhere.
These are some of the aspects that you need to consider when you want to opt-in for a flip house business. It will help you to plan and progress better in your flipping house business.
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