When you decide to start flipping properties (or have been doing so for years), you must be aware of the facts. You must choose the correct houses to flip, or you may have difficulty finding a buyer when the time comes.
If you want to acquire a house, fix it, and sell it for a profit, selecting the ideal project is the first step.
So how do you find the right project? Here are a few things to consider when selecting a house for your next flip in Texas.
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Understand Your Market’s Trends
The Texas real estate market is currently undergoing significant price and appreciation changes. Many locations are witnessing increased value and volume, but not all of them.
Even in your city, you’re likely to find that some communities outperform others. The first step in identifying a potential fix and flip opportunity is determining which market segments have the best prospects.
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Check All of Your Sources for Properties
Each real estate “expert” will have their source for locating potential properties for their next fix and flip project. Some would advise contacting REO departments at local and national financial institutions.
Others would advise you to keep a watch on classified ad sites such as Craigslist. Some will then advise you to place “bandit signs” on street corners throughout your neighborhood.
However, don’t limit yourself to a single source for finding properties for your next fix and flip; instead, use them all. Other locations to look at are:
- HUD-owned properties
- Trustee auctions
- Local MLS listings
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Never Overlook Homes With Cosmetic Issues
The “fixing” is an essential aspect of Texas’s fix and flip industry. While finding properties you can fix and flip that are currently in marketable condition is possible, the availability and margins on these types of properties are typically relatively low.
To get better deals and earn a sizable profit on your next fix and flip in Texas, go for homes that require some work to obtain their full after-repair value.
Often, the houses with the most substantial upside are structurally sound but have cosmetic concerns preventing them from attaining their full worth. This can include out-of-date interiors and a need for outdoor maintenance and landscaping.
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Work With Motivated Sellers
The expression goes, “money is made when you buy,” which means negotiating a reasonable purchase price is essential to successful fix and flip investing. Therefore, stick with motivated sellers if you want a decent chance of negotiating a reasonable buying price.
These are the people who need to sell their property for whatever reason. These might be banks that aren’t in the business of owning and selling real estate or private individuals experiencing financial difficulties. They can also be persons who recently gained real estate through probate, or they can be a divorcing couple who needs to divide their assets.
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Don’t Be Afraid to Pass
Finally, never become so in love with a home that you’re willing to pay more than is financially reasonable. The exhilaration of finding a project that could be a wonderful fix and flip property often drives people to make irrational judgments, especially with rookie investors.
No matter how much potential a home has or how long you’ve looked for it, don’t be afraid to walk away if you can’t reach an agreement with the seller; there will always be other options out there.
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Secure the Necessary Financing
After you’ve identified a fantastic fix-and-flip opportunity and secured it under contract for a reasonable price, you’ll need to secure funding for the job as soon as possible. When it comes to fix-and-flips, time truly is money.
Thanks to private money lenders like Merchants Mortgage & Trust Corporation, real estate investors and house flippers can quickly secure short-term financing – often for 90% of the acquisition price and remodeling costs – and receive capital considerably faster than banks.
Looking to Fund Your Next Project
Are you looking to get into fix-and-flip or seeking to finance your next small-sized commercial property? Merchants Mortgage & Trust Corporation can provide information on getting the private money loan for your next fix and flip or construction project. Contact us right now!