Flipping Homes: From Research to Fix and Flip Financing
If you’re looking to become an entrepreneur and make some additional income, opportunities still exist to Fix and Flip single-family homes and multi-family residences in South Florida. Although finding flipping opportunities has become more difficult, there is still room for profit if you are discerning in your search and knowledgeable about the process. Let’s start at the beginning: locating the ideal property for your Fix and Flip.
Know the Neighborhood
When considering properties to Fix and Flip, it is imperative that you know the neighborhood. Before taking any other steps, check the comparative prices and sales history in the area. If you don’t know the history of sales prices, you won’t know how to make a sensible offer that leaves room for you to make a profit. This brings us to the second and most important factor in the process: the acquisition price.
Purchase Price is King
When purchasing real estate, you make your money when you buy the property. Your fix and flip purchase price dictates everything you do from that moment on, which is why it’s essential to be well-informed about the area and sales trends. Do your homework, or you’ll be struggling before you even step foot inside the house.
Study your Surroundings
The third factor to consider when purchasing a home to Fix and Flip is location. Part of having a good understanding of the area where the home is located is analyzing the surroundings. In the past, that meant school districts above all else, but another aspect that is gaining significance is ease of transportation. A centrally located property in close proximity to public transit is certainly an added value. As part of your continued research, look into city and county plans, find out where new transit is being built or proposed in South Florida, and search for properties in those vicinities.
Fix and Flip Financing
Now that you have narrowed down your options, make a comprehensive plan for the work that needs to be done prior to making an offer:
(1) An accurate cost analysis is necessary to ensure that there is room for profit once the scope of work is completed. You must also leave a contingency fund for unforeseen complications, particularly when dealing with older homes.
(2) Schedule an inspection. Making an impulsive purchase or buying “sight unseen” puts you at serious risk. Without an inspection, you can’t properly assess the condition of the property or budget for repairs—and without a detailed and accurate budget, you can easily overrun costs and overspend.
(3) Create a plan for fix and flip financing and have a clear understanding of your financial needs. Omit this step, and you might not have the capacity to cover unexpected costs; you might even lose the property if you’re unable to carry the property for a longer period than expected.
(4) Once you have all your numbers, you must be prepared to apply for financing. Your financial structuring must be in place before making an offer to ensure that you are able to act swiftly, successfully complete the project, and sell it for a profit as quickly as possible. Having a direct lender who can take you from A to Z, help you secure your fix and flip financing, and give you the personalized service you deserve is the best decision you can make when investing in your own future.
Flipping homes is a competitive industry, and it can be risky without the proper knowledge, research and careful planning. Having an expert on your side is a prime advantage when trying to navigate the South Florida real estate market and structure financing for your purchase. At BGI Capital, we take our clients through the entire process from beginning to end. We don’t just walk away when the loan closes; we become friends and trusted advisors to all of our clients. If you’re interested in learning more about our philosophy and range of services,