Should You Flip That House?
October 3, 2018
If you are in the business of flipping houses you know that it takes the perfect scenario for a house flip to be successful. The price, location, and condition of the home all have a huge impact on whether the house will be a flip or a flop.
Flipping is a risky business, but under the right conditions it can be a great investment. But what factors can make a flip more successful and profitable? Let’s take a look.
Cost is one of the most important factors to consider when choosing a house to flip. If the cost of the home is high for market value, the chances of turning a profit are very low. If, on the other hand, you can get a home at auction for significantly under market value, there is a much better chance you can turn a good profit. In addition to the cost of the piece of property you’ll also need to have a good estimate of what it will cost to make any adjustments to the home.
There is really only one thing you can’t change about a home, even with unlimited funds, and that is its location. Because of this, many homeowners will purchase a home simply for its location. Naturally this is an important consideration when selecting a home to flip. You can make all of the changes on the inside of the home you want, but if it is in an undesirable neighborhood it could be difficult to sell.
Condition and Work
Finally, you’ll need to carefully consider the amount of work the home requires. A home that will need extensive work to meet inspection standards may not be a good option. It is also important to consider the cost of repairs, because you’ll need to make more than you put into the property. One of the best ways to save on renovation costs is to invest in properties that need work in areas you are skilled at. By doing a significant amount of the work yourself you can lower your costs and increase your profits.
Investing in properties with complicated issues that will need to be addressed can really cut into your profits, so investing in an inspection is essential. A home with mold problems, foundation problems, major electrical or plumbing problems, can wind up over your renovation budget and significantly cut into your profits.
Are You Looking for Hard Money Loans in Maryland?
Flipping a home can be a great way to invest in properties and make some serious money, but only if you invest in the right properties. If you are in the house flipping business contact us at Maryland Private Mortgage today to discuss your loan application.
We are Maryland investment property lenders and we understand the ins and outs of investment properties. Give us a call today to discuss how we can serve you!
The Maryland Private Mortgage Lending Team
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