Knowing what to do and what not to do BEFORE you purchase a property to flip can make all the difference. Preparedness is key! Here are 10 more things to consider before starting a new property flip:
#14: GET TO KNOW THE NEIGHBORS
Talk to the owners of the homes near the property you want to flip. They often know the history of the home and can alert you to problems (“this house floods every year.”)
#15: CHAT WITH THE MAILMAN
Seriously. Mail carriers know neighborhoods better than almost anyone. Talk with your mailman about potential leads. It wouldn’t be unusual for a postal worker to have information on potential leads.
Don’t’ underestimate the value of not only LOOKING for posted ads on Craigslist, but also POSTING ads yourself.
#17: FOLLOW PUBLIC EVICTION RECORDS
Evicting a tenant can be stressful, resulting in extra motivation for a landlord to sell the property. Reach out to landlords in this situation, by monitoring eviction records for properties that meet your criteria.
#18: SPREAD THE WORD
Tell everyone you know that you are interested in purchasing real estate. The more connections you have, the more likely you are to find properties that are ideal for your situation and goals.
#19: HIRE HELP
Consider hiring and training someone to look for and find deals for you. Time savers like these can result in profits that will easily pay for the cost of the hired help.
#20: PLAY THE GAME
Be sure that you make a lot of offers. You don’t need to be the person hounding real estate agents, but often real estate is a numbers game. The more offers you make on properties that fit your criteria, the better your chances will be at securing one.
#21: KNOW YOUR ARV
Your ARV is your “after repair value.” This number is crucial and you need to be confident in it. Your bottom line and profit margin depends on this number, so do your research and be certain you have it right.
#22: FUTURE VALUES
There’s a good chance you don’t have a working crystal ball kicking around your home; allowing you to see into the future. Don’t be tempted to ASSUME that property values are going to appreciate in the when determining your ARV. Always use the ARV value of the date you purchased the property. That way, your numbers won’t be skewed if appreciation doesn’t occur.
#23: LEAVE EMOTIONS OUT OF IT
Keep your financial assessments focused on the numbers. Don’t let your personal excitement about a property influence rational thought. The numbers are the numbers, regardless of how excited you are about a potential location.
For more information on property flipping and financing, contact Black Square today.