When it comes to house flipping, property investors know the key tips to profitability. Get the investment property at the right purchase price, do your homework on comparables and know how to properly estimate ARV.
While these are all must-do tips, don’t overlook other key pointers. Check out these property investor tips that can be done throughout the fix and flip process to increase your earnings and save you thousands.
3 Money Saving Tips Not to Miss in House Flipping
- Start with an engineer’s report. Many older homes or homes in disrepair, which are often ideal property investments, will need some foundational repair to meet home inspections and be attractive on the market. The key is getting an engineer’s report before you hire a foundation repair company.
An engineer can inspect and evaluate the foundation at a cost of $400-$500 and provide you an unbiased report on exactly what needs to be done to make the home fit for buyers or tenants. “The engineer’s job is to give you your answer to the problem vs. a foundation company’s job is to fix it and make money,” advises Jeff Johnson, a property investor himself and director of lending at Catalyst Funding, Houston.
When you have the engineer’s report, then hire a home foundation company for exactly what the engineer’s report advises.
Your Savings: Foundation repair work can quickly add up to $10,000+ for a single home. Being educated from the start of a home rehab project can save you thousands of dollars by ensuring you are spending money on the right repairs and are prepared for home inspections.
- Use a real estate agent with experience in house flipping. A realtor who understand home rehab projects knows how to talk to other agents and potential buyers to correctly educate them on repairs, the home inspection report and how the rehab work was done. Some buyers may hesitant or have lots of questions when they learn about significant repairs or upgrades to an older home.
A great way to meet agents and others in property investing is through networking events. With deals coming and going every day, connections in the real estate industry are vital.
Find out about networking opportunities by signing up for property investor newsletters, such as our Catalyst e-newsletter. We post everything from real estate networking events, industry news and real estate deals and opportunities.
Your Savings: You can gain thousands of dollars in your selling price by having industry connections and an educated agent who can confidently answer rehab questions and understands the house flipping process.
- Don’t be afraid to aggressively reduce the price. If you have an investment property that is sitting on the market and not drawing interest, don’t be afraid to aggressively reduce the price. Months of holding costs will quickly add up the longer a property doesn’t move.
Also, potential buyers will begin to speculate on reasons why the property has not yet sold. The longer it doesn’t sell, the more speculation will grow and the more you may need to decrease your selling price.
Your Savings: Save months of holding costs and continued price reductions for a property that isn’t moving. Gain thousands by setting a price that attracts attention and potential buyers early on.
A final tip: Don’t be afraid to ask questions from those experienced in property investing and house flipping. The do’s and don’t they’ve already learned can be money in your pocket.
At Catalyst Funding, we are hard money lenders who offer more than just lending. We are real estate investors ourselves. We provide resources and connections in wholesaling, house flipping, rehab work, property management and more.
For more information, contact Catalyst Funding online or call us at (832) 648-3626.