By Emma Sturgis
Investing in real estate is one of the best ways to build wealth and earn a high income. When investing in real estate, there are a number of ways in which you can acquire property. And among the most lucrative real estate investment opportunities is house flipping.
Related: How to Afford Investing in House Flipping as a Career
But before you set your sights on flipping houses, here are a few steps that you will want to take before you buy that first property and try to turn it around for a quick buck:
Searching for Properties
The first step in house flipping is searching for a property. While you can buy a house that is already in great condition, one of the keys to making significant profits with house flipping is to purchase undervalued properties. As a result, you will want to look for distressed homes or ones that need major cosmetic improvements. The most profitable way to flip houses is to buy a run down property, renovate it and then sell it.
Getting Comps
Along with searching for a property, you will also want to find comparable homes (comps) in your local area and figure out what they're selling for. It's important to know what homes are going for in a given area based on their condition. With comps, you can get a better idea of how much a home is worth before buying it and help determine if you can make a substantial profit.
Making an Offer
The next step is to make an offer on a property once you find one that meets your criteria. Since the U.S. real estate market is very competitive right now, you will need to be very careful that you don’t overpay for a house. A good strategy when making an offer is to find a home that is undervalued and offer as much as $30,000 over the asking price. Once you get the home under contract, make sure that you can make your desired profits with a few renovations.
Getting Financing
Although most house flippers pay for homes with all cash, you can use investment property loans to acquire a house if necessary. When looking for this type of loan, consult with a mortgage broker who can find you financing with the lowest interest rates. In addition to getting a low interest rate, look for a loan that you can pay off entirely as soon as you sell the home.
Flipping houses can help you make a lot of money within a short period of time if done correctly. When flipping, it's a good idea to look for a buyer ahead of time so that you can make an even quicker sale. Start making profits through short-term real estate investing today!
Emma Sturgis is a freelance writer based out of Boston, Massachusetts. She writes most often on health and education. When not writing, she enjoys reading and watching film noir. Interested in obtaining an investment property loan? Sturgis recommends contacting Constructive Loans. Say hi on Twitter @EmmaSturgis2
