Questions To Ask Yourself Before You Start Flipping Houses

Top 7 Questions To Ask Yourself Before You Start Flipping Houses

Flipping Houses in New Zealand or Australia can be a profitable venture if done right. However there are various pitfalls you need to be aware of and questions you must ask yourself before you dive head first into what can be the murky waters of this type of property investing.

What does House Flipping mean?

The true definition of house flipping is the purchase and sale of a property in a short period of time, ideally within 90 days and no more than 6 months. Buying a home, moving in, renovating and selling it after a year or two is not flipping a house.

What should I focus on purchase price or sales price?

Flipping Houses is a business and no business can function without a healthy margin. This being the difference between purchase price, the value add cost and the sales price. The better you can buy even in a slow or declining market the better your flip will be and thereby lowering your risk.

Where do I find a good deal?

In any major marketplace there are usually a number of fix-and-flip investors looking at the same real estate for sale listings as yourself so the chances of finding a great deal on your typical real estate for sale website are quite slim, but not impossible. The key here would be to get in quick as soon as the property is listed online or purchase via auction with the hope that not many buyers turn up ready to bid. Many a good deal have been bought in the auction rooms.

How much should I budget for my first flip?

If you are a novice you should really not be starting out on a property that requires major work such as a new deck, removing then installing a new kitchen, a complete bathroom renovation, foundations, electrical rewiring, all new plumbing and the like. Focus your energy and money where your buyer’s eyes will be as well as the feel and smell of the property as these may be the things of greater importance to a buyer as you never get another chance to make a great first impression.

How quickly should I get the job done?

The quickest flip done by the team at 90 Day House Flipping was 42 days and that saw a $65,000 uplift in value from a property purchased at auction. A two to three week cosmetic renovation is really what you should be aiming for in order to get in and out in the shortest timeframe possible. This is however greatly dependant on your skill set, who is going to be doing the work and the availability of those doing the work. Not to mention your ability to organise, prepare and present the property for sale with everything done in a timely manner. Time is money so the quicker you can get in the quicker you can turn the property around ideally for a profit and move on to your next purchase.

Will the property sell or will I get stuck with it?

There’s an old saying in real estate that everything sells. However that is correct to a point; being that you have completed your market research correctly, purchased the right property, in the right location, at the right price or terms. The last piece of the transaction would be the sale and picking the right sales method to complete your sale is equally important, as this is how you get paid. Professional House Flippers tend to follow the same system over and over again as they have found a system that works for them that has not let them down, meaning they rarely if ever get stuck with a property.

Who do I talk to for guidance?
Tom Faye founded 90 Day House Flipping which is a property investment and education business. His business provides solutions to the marketplace such as educating investors on how to find their own properties and then buy, renovate, and revalue both on and off market properties. Using the principles he delivers, Tom became successful within 18 months of getting started House Flipping transacting $11,000,000 of property in a short period of time.

© Scoop Media