Flip or Flop?

There are things to be considered when trying to “flip” a house, or other property investments, for profit. If you are using private money, which is short term, with high interest rates with a benefit of quick approval, you want to make sure you are able to “flip” it in a timely manner or you just might “flop”.

In today’s struggling real estate market, don’t be afraid to make a low offer. The worse thing they can say is “no”. Do not get discouraged if it is a “no” today, because it might not be a “no” tomorrow. Each day brings new challenges for sellers. If you see the property still on the market as days and maybe weeks go by, offer again. Make sure you have your funding in place. That is bargaining power. You are a buyer ready to close. If you are sure of the potential profit, based on the knowledge and possible acceptance of your offer, private money may still be an option here.

Make sure you understand the costs involved in the entire transaction. You don’t want to be caught off guard. This means getting prior estimates on any major and minor repairs; any interest payments to the lender; closing costs; any holding costs if they apply and sales commission. This is why you want to avoid properties that have problems with major components like heating and air, electrical, and plumbing. You don’t want to find yourself rewiring the electrical components of an entire property when you are counting on a quick turn around sale and a limited budget. That would sure be a “flop”.

Know your market, meaning know your buyer. What are they looking for? What is considered necessary and common in that community and what is considered luxury. In other-wards, how do you get the best bang for your buck? In today’s market, timing is essential. Set a time-line for yourself and buy, fix, and then flip fast. If there are skills or gifts that you personally have to bring to the table, do it. There is no need to wait on someone else to come and do the work if you have the time and the ability. So basically, if you don’t mind getting a little dirty, “refining the time may save a dime”. This does not mean if you “think” you have the skills. You don’t want to pay for the job twice. So judge your skills correctly.

These are just a few things to consider when trying to “flip” a property for profit. If you have already “flopped” once, then the worst is already over. Dust off yourself and try again. Sometimes failure can catapult you toward success.

Blue Light Financial is a private lending group aimed at helping investors take advantage of market opportunities in a timely manner. With a sound investment strategy and a determination for excellence, Blue Light LLC has been solving client’s financial needs for over 28 years. For more information about investing with Blue Light LLC, please visit our website at: http://www.bluelightfinancial.biz.