Flipping house, the new real estate trend
February 3, 2022
In the USA it is a widespread and common practice among big businessmen and movie stars such as Adam Levine, Ellen DeGeneres, Diane Keaton and Leonardo DiCaprio, who have become some of the most successful ‘house flippers’.
The philosophy of house flipping is based on the fact that buyers prefer a house in perfect condition to move into, rather than having to start renovating once they have bought it.
Step by step to get started in house flipping:
- Search of the house: The success of the operation will fall mainly on the price of the house that we find. It must be between 15% and 20% below the market price for it to be profitable.
- Prioritize the location: Prices vary a lot depending on the area, as well as the type of buyer interested. We must also check that there is a buying and selling movement in the area.
- Condition of the house: To assure the good structural condition of the house, in spite of being willing to reform it, the structure should not be touched.
- Negotiation: Once we have located the house, the time has come to negotiate the price with the buyer, we must have perfectly calculated what our limit is, that is to say, from what amount we will obtain benefits.
- Reform: Once we already have the house, it is time to consider the reform so that the living room, kitchen and bathroom are a priority. We can offer a differential value compared to the adjoining houses in terms of number of bathrooms, etc. We leave you this previous post in which we give you 7 previous steps to take into account before making a reform.
- Speed: The sooner you start to move the property and the sooner you can sell it, the better. An interesting strategy is to put it on sale in the middle of the renovation, since the expenses decrease considerably.
How to get cheap homes or real estate bargains:
- Hire a real estate agent, in our real estate our commercial agents can help you. Contact us here.
- Real estate portals, check the apartments that are in the last pages, these are usually the ones that have been on sale the longest.
- Banks, all banks have a portal where they put their apartments for sale, usually these are foreclosed homes.
Keys for a successful house flipping:
- Calculate very well the value of the property, taking into account its condition, the area, the type of buyer in the area and the size of the reform.
- Get a good manager to advise you on the legal aspects and all deductible expenses.
- Work as a team with architects and interior designers who will help you to plan the renovation, according to the type of buyer in the area.
- Get a company of reforms, formed by contrasted professionals that work well and fulfilling the established terms.
- Sell at market price and sell fast, the less time we own the house, the less expenses and the more money we earn.
At Espígul we work in the construction and renovation, development and real estate sectors. We can help you if you are thinking of becoming a house flipper.
