How to Flip a House
Sunday Oct 16th, 2022
FLIPPING A HOUSE
In todays market, many people consider getting into the real estate game of flipping a house. It doesn't look difficult, as we watch the various TV shows broadcasted daily across the country, let's try and make some extra money. Not a bad idea but just make sure you are prepared. Do the research, calculate your budget, make sure the margins will make you money.
IS IT A GOOD INVESTMENT, WHERE TO START
Yes absolutely in the right circumstances. There are key factors to consider which I will outline. Generally a flip will require a renovation and/or tear down and rebuild. A renovation is substantilly cheaper and creates more of an in out investment. You need to consdier the market time of bringing the home up to date. It will only be a good investment if you make a return on your money.
THINGS TO CONSIDER TO FLIP A HOUSE
Location Location Location
This old saying comes to light. The nighbourhood of your choice needs all of the amenities which Canadians want to enjoy. Is there easy acess to shopping, shcools, green space for recreation, ie parks, community centres, bike trails etc. Research most recent sales and ask your Realtor for a comparable market analysis. RE/MAX prepared a 2020 Liveability Report you may find very help in determining the facts.
Timing and Present Market Conditions
How long do you estimate the renovation will take. What time of the year will it be completed, you may want to avoid November and December Holiday season completion. Set a time line for every step of the way and try your best to stay organized. Make sure your materials are avaible with easy delivery. Remember as the house sits empty it costs you money, you cannot have unnecessary and avoidable delays. Renovations should be in an out. If it is a tear down then the whole flip is a different situation. Tear downs are extremely expensive and there are many variables with permits through the whole process. They require a substantial outlay of funds.
Find a Reputable Contractor
One of the best ways to find a Contractor is through word of mouth referrals. Ask your friends, clients and family for a recommendation but only if they have use the Contractor personally. Be careful of recommendations where the companies have not been hired. Make sure your Contractor breaks down the quotes of every entity of the job and not a one price quote fits all. You will need to be on the same wave length especially with materials. You can easily shop your own materials and take advantage of the LINDA PINIZZOTTO real estate Group relationship with various Commercial Accounts and enjoy discounts and savings. It is a goodwill gesture with no obligations. The accounts include 40% off paint, stains and all materials found in a paint and wallpaper franchise plus manufacturer pricing for all types of flooring and broadloom. 20% off landscaping and materials, 15% off plumbing and electrical materials.
How do you price your Renovated Home
You will need to discuss the values in the area with your Realtor. The Linda Pinizzotto real estate Group will keep you up-to-date on values during the process. If you price too high for the neighbourhood, Buyers may turn away and pricing too low may not cover your renovation expenses, time effort and carrying costs. It is important to have a Profit and Loss Budget set out from the beginning. There will be a cost for you to borrow the funds from the Bank whether you mortgage your home or have a line of credit. Every day the house sits empty costs you money so you need to be prepared before you sign and buy a home with the intention to flip it.
Determine an estimate for the overall project. Make sure you have researched the availability of materials and products, you can't lose time while you wait for back orders. Try to stay neutral and not too over the top customization which would only attrack a certain buyer. It can be an enjoyable experience with good rewards but you need to be prepare and systematic on how you work through the process.
Advice from Linda Pinizzotto
Let the LINDA PINIZZOTTO Pinizzotto Real Estate Group represent you throug the whole process from buying, funding, savings and discounts, renovating and selling. We can work through the process and ensure you have every opportunity to have a successful project that covers all expenses, takes less time and provides excellent financial rewards.