Fix-and-flip homes can be a great way to build your financial portfolio, provided you buy smart and sell strong. You can’t just buy any property to fix and sell, you have to do your research. You’ll have to dig deep into the property itself and what needs to be done to it. To evaluate the worth of the property, ask yourself these questions:
- Will Home Buyers Want the Property? Your fix-and-flip property won’t sell if it doesn’t have benefits to home buyers. Learn about the neighborhood, crime rates and school districts before buying. What type of buyer will want the property? The school district won’t matter if it’s primarily a retirement community.
- What have other homes sold for in the past three months? Go through the MLS and look for nearby properties to understand the local market. What do buyers want when they move to this area? What types of amenities do they want in the house? How big are the homes and what features are most important? How much updating will the home require?
- How does the property compare to others? The property you’re hoping to fix-and-flip needs to be comparable to others in the neighborhood once you’ve made improvements. What do you have to do to bring the property up to other homes around it? The property shouldn’t be overly expensive, but it can’t be too cheap, either.
As you consider properties, look for homes that need cosmetic work instead of internal upgrades. It’s the plumbing, roof, electrical and HVAC repairs that will be most costly. To be successful, you don’t want a lot of money tied up in the project until it sells. But take a look at the whole community before buying the property.
Looking for financing for your fix-and-flip property? Contact Flex Capital for funding options that will help you be successful?