If you’re thinking about diving into house-flipping, we have a word of caution for you: Don’t do it unless you’ve done your homework.
Here’s what we often see go wrong with first-time flippers.
What if You Try to Flip a House Without Understanding the Market?
Flipping a house without doing your homework can be disastrous. Here’s why:
- If you buy a house without understanding the real estate market around it, you won’t know if you’re really getting a good deal. In order to make a solid profit, you’ll need to buy the property below market value, minus the cost of repairs you’ll make.
- If you don’t know a house’s potential value – meaning how much it’ll be worth once it’s repaired – you can’t make a profit. What you want to turn the house into has to be a good fit with the neighborhood – and people’s ability to be able to afford the house in that neighborhood (as well as their desire to live there).
- You have to know how to price the house to sell it. A real estate agent can help you with that when it’s time to list it for sale, but you still need to know how much it’s going to be worth before you even buy it.
Sometimes it looks like a house is a steal – like when you find a roomy house with a lot of potential for, say, $150,000. However, if the house is in a community where houses only sell for $175,000 at the most, any renovations you make might only bring the price up to that amount… and you’ve invested your time and money into something for very little profit.
Are You Looking for a Hard Money Loan to Flip a House or Buy a Rental Property?
Paces Funding is a hard money lender offering hard money loans to purchase and renovate non-owner occupied residential and commercial properties throughout the Atlanta, Nashville, Florida, or the North and South Carolina metropolitan areas. Our application process for hard money loans is easy. Just fill out this very simple online form and you will be contacted shortly. Unlike other lenders, the window between applying and funding is very small. We have funded properties in as a little as one day, but typically funding hard money loans takes about 7 to 10 days.
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.