Flipping Houses is seldom about a single flip. The idea of turning a massive profit on a single fix and flip makes for great TV but is unrealistic when ratings aren't on the line. The reality is that turning a profit flipping houses relies on steady, smaller profits, rather than huge six-figure returns. In baseball terms, you'll bet more learning to play small ball than hoping for home runs.
The big “secret” to flipping houses becoming a viable investment is to manage your utilization of resources. One of the most common areas of mismanagement is holding onto a property too long.
But it Needs Time for the Work
Realistically, four to six months should be your target turnaround time. It will take you a month to find a competent and available contractor; it should take no more than two to three months of work to have it ready to hit the market. If it will take longer than that, the property needs too much work and takes a bigger chunk out of your return for the flip.
But if I Wait the Market Could Go Up
Don't bet on the real estate market trends. I know, you did research. I get it, you have a hunch. Many people have lost their shirts watching for the market to head one way when it heads another. Even if you are right, however, it may not be worth it. Which brings us to…..
But I Have so Much Put Into It
Yes, you do. I'm not saying take a loss, but I am saying recognize that flipping houses sometimes means taking the small payout to get a bigger one. Remember where I said this was about resource management? If you have $150,000 tied into a house you are insisting on making $25k on instead of $20k, that is a potential of $170,000 of property you aren't buying to flip for $30-35k. When your house is sitting, your money is sitting and not working for you.
Flipping houses can be a lucrative business, but it takes time and resource management. When partnered with expertly managed capital investment, it can be a sustainable income with unlimited growth potential. Learn how Hard Money financial backing can work with your experience to maximize your real estate investment capital.
Know Who You're Selling To
If most of the homes in the area of your fix and flip sell to families, you'll want to make the home appealing to parents who are thinking about their kids. Make sure there are enough bathrooms for a family, or add in a bonus room for the kids to use as a play area. Families tend to enjoy open spaces, so changing a closed off kitchen, or dining room, into an open floor plan helps you appeal to your targeted buyers. Treat each house as an individual. Pay attention to what sells in the area, and use that knowledge to fix your home, so your house will sell sooner.