House flipping can be an easy way to make quick money. Then again it isn’t for everyone. If done correctly, flipping a home can be a profitable money-making proposition. Most folks know someone that does this for a living and is good at it.
Most people at some stage have thought of flipping a house and HGTV makes it look so simple. All you have to do is buy a fixer-upper, put in some money, and make $50,000. Unfortunately, the reality of flipping houses for profit isn’t quite as simple as reality TV makes it look.
The most important thing for any property-flipper is that you need good credit to get into the business of flipping houses. It’s advisable to have a credit score of at least 700 or better to get approved for a low mortgage rate. If you notice that your credit score is lower, it is advised to pay up old debts and to build back your credit.
Next thing is, you need to figure out your budget, what your plans are, and where you are looking to flip. Some of the questions to ask youself:
- How much are you willing to spend?
- Where are you looking to flip?
- What type of house are you looking to buy?
- How much do you want your profits to be?
- What do you want for an outcome?
Flipping properties is interesting, but you want to research, know, and have an understanding of the market where you are looking to flip a property. You might find the whole idea enticing but might not take the time to research the market where they are trying to flip completely, and they run into issues.
The best strategy to flipping a property is to buy a house in a HOT neighbourhood with growing demand. This location would offer easy access to transportation, parking grocery, and other services. When you have all the above, a buyer will be prepared to pay more for your property. The down payment should be a minimum of 20% to help increase your chances of getting financing. The more you can put down on a property the simpler it is to get approved for a mortgage.
- You need to have a contractor you can trust
- What did your renovations cost?
- What do your closing and selling cost?
- What will be your carrying costs?
- Is there any tax deduction for flipping this property?
- Do I have access to extra income?
- Determine your realtor’s fees
- Estimate the total return
Related : 5 tips for buying a house in Canada for dummies
It is recommended to hire a realtor to assist you with market absorption rates. It’s crucial to work with a trusted Realtor that has a good knowledge of the market, area, and where the buyers are. A smart Realtor will help you work out the best price possible for the home. They will also market your home on MLS, social media, and the internet which will produce more interested buyers.
We hope, after reading this post, you will have attained a greater understanding of what it is like to flip houses. If you are thinking about flipping a house in Thunder Bay. As mentioned throughout this article, you should be doing your research, doing your due diligence, and considering whether or not this is the best decision for you at this point.