For most people who are interested in flipping houses – the practice of buying a house in need of some TLC, fixing it up, and selling it – it makes sense to analyze every last dollar involved in the deal.
Unfortunately, not everyone knows how to do that.
What is Deal Analysis?
Deal analysis is the process by which you determine how much you can pay for a house in order to cover all the expenses of fixing it up and selling it. You want to make sure you can still make a profit after all that’s done – after all, that’s the point of flipping houses.
Here’s what you need to do: Determine the after-repair value, or ARV, by talking to experts in the area. Find out what homes with modern amenities are selling for in the area.
Now do the math. If you spend some of your hard-earned money on that house and it doesn’t sell, you’re going to lose everything you put in. If it does sell, but it takes months, you may not be making a big profit… but at least you won’t lose it all. The ultimate goal is to buy something, fix it, and sell it quickly (and at a price that nets you a healthy profit.
Are You Looking for a Hard Money Loan to Buy a Property?
Call us at 404-814-1644 or contact us online to find out whether you might qualify for this type of funding. In the meantime, check to ensure that you meet our loan criteria. Our loan amounts can be up to 65 percent of the after-repaired value of the collateral—and if you use the loan for renovation or construction, the loan amount can be based on the collateral’s improved value.
Read our frequently asked questions and take a few minutes to learn about the hard money loan process.