Equip yourself to ace the Flip!
Buying, fixing and selling properties can be a powerful strategy to make a LOT of money. But since it involves a lot of moving parts, it is not without risks. Is there a way to reduce your risks?
Here are a few tips and tricks for those starting their property investment adventure:
Start small. Find a property that requires cosmetic changes to be made only.
fresh coat of paint internally
paint the outside walls
paint the roof
replace kitchen counter tops
paint the kitchen cabinets
replacing cabinets quickly becomes pricey so aim for painting only. You’ll be amazed at the difference it can make!
install new tiles in bathrooms and kitchen
replace outdated light fittings
put down laminate floors
lay new carpets in bedrooms and lounges
These are basic, inexpensive items that can be done quickly. Remember that the goal is to buy/fix/flip as quickly as possible. In general, people do not want to buy a house that requires work. They want something that looks fabulous so they can move in and have their friends over for a braai that very weekend!
Perform your due diligence on the property and neighborhood. Use local websites to assist you.
lightstone.co.za works for South Africa
rightmove.com works for the United Kingdom
The goal of this research is to determine the following:
what are distressed properties selling for?
how much for an average home in the area?
what can you expect to pay for a beautifully renovated home?
how long do these different types of properties tend to sit on the market for?
You simply have immerse yourself in the numbers and know all the right people.
Have multiple exit strategies. Have a Plan A…Plan B and a Plan C. if you don’t have at least three exit strategies, walk away from the deal. This way you hedge against any unexpected issues that could come up. And they will come up! If you are flipping, make sure you price the property slightly lower than the average property because you don’t want it sitting on the market for longer than necessary.