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House Flipping How To Choose Your Next Hot Investment Property
he first thing to remember officer or other mortgage
is that: you’re in this professional and talking about
business for what type of financing you have
investment—I.E. to make money—not available. If you have a pool of
loose it. The quickest way to savings to tap or can liquidate
disaster is to let emotion get some assets to be able to pay
involved. Buying a property cash for a home, that’s the best
because “it looks exactly like financing situation you can be
the home you grew up in” or any in. Otherwise, talk with a
other similar emotional reason is mortgage professional about how
an easy but big mistake. When it much you can afford and get a
comes to choosing a property, let letter of pre-qualification or
your wallet choose. If you only pre-approval for that amount.
have a modest budget to work
with, don’t try to rehab a At the same time, you will need a
$400,000 property with foundation budget for your rehab project.
issues—you’ll eat through your This should include projected
budget too quickly. Choose your expenses for selling the home
first project carefully—it should once it’s rehabbed. Once you work
be easy enough to get your feet out your budget, subtract 10% and
wet and relatively low risk. You that’s the amount you should use
might not make as much as a as your realistic budget with a
high-risk project yields but 10% cushion.
you’ll be learning as you go and
in this business, knowledge and The next question is how do you
experience mean money. go about finding your first
property to rehab? Well, your top
The first step is getting your resource is your local real
finances in order. This usually estate expert. Being a local
starts by contacting a loan REALTOR, I see many properties
come up every week that would forthcoming about what you’re
make great rehab projects for looking for and what you’re not.
first-time rehabbers. Just Once you find a few properties
remember: as a buyer, you won’t that meet your price range and
have to pay your REALTOR for budget constraints, have your
their assistance. When I work REALTOR set up private showings
with buyers, my fees are paid by for those homes. That’s where the
the sellers of the home you will real business of finding a good
eventually purchase with my help. rehab project happens.
When preparing to go see a
Once you have your budget and potential project, you should
financing in place, contact your bring a few important things.
local real estate professional These include a pen and notebook
and give them the numbers—the for taking notes, a measuring
more information you can give tape, trundle wheel or sonic tape
them about what your budget is measure, a small tool kit with
and what types of homes you are basic tools and a flashlight.
looking for, the better they will Remember, many of the homes you
be able to aid you. It won’t be might be looking at are going to
long before your REALTOR starts be in poor condition and likely
sending you information about be without power, water and gas
homes that meet your service. Always dress for the
requirements. occasion—in long pants/sleeves
and work boots if you have them.
You should always seek to A good pair of work gloves is
establish trust with your also vital.
REALTOR—your bottom line depends
on them finding you a great When you set foot on the
project. Always be upfront and property, you have to act like a
detective. Look for hints of past be to do this quickly. Often,
and recent leaks, foundation good rehab projects sell quickly,
issues, structural issues and so you may not have a day or two
other major defects that can kill to think it over. Pay attention
your project. At the same time, to big-ticket items that add up
you should be adding up the fast like a roof tear-off or
estimate costs of the rehab work foundation repair. These are the
that is needed. If you did your expenses that can quickly put a
homework and have an idea of what rehab project in the red.
things cost, you should be able
to estimate some values. Make At the end of the day, you should
sure you take room measurements have an estimate of what the
so you can better estimate rehab work should cost. That will
expenses for carpet, tile and give you a good idea of what your
similar items. bottom line is for purchasing the
property. If the investment
After you’re done, it’s time to seems sound and you decide to go
crunch the numbers. Go over your forward with the purchase, the
notes and start adding up next step is to make an offer.
estimated costs. Your goal should
About the Author:
Eric Rogers has been recognized as a local real estate expert for homes for sale in Aurora and Naperville Subdivisions.
Read more articles by: Eric Rogers
Article Source: www.iSnare.com |
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