Homes that have fallen into disrepair can be a rehabbers
dream. A seasoned pro can size up a home fairly quickly, and make an educated
assessment as to whether it will provide a solid return on investment after all
the work is complete. This evaluation is often the largest determining factor
in whether someone is successful in the fix-and-flip business, so it literally
pays to do the research ahead of time.
Unfortunately, there are no guarantees when it comes to
rehabbing and flipping houses. Even experts in the industry get burned from
time to time, so you have to exercise diligence, and leave yourself wiggle
room. The amount you offer for the home should be enough that after you pay
fees, repay your Texas hard moneylenders, and cover repairs, that there’s a tidy sum left to reimburse you
for your efforts. It’s wise to build a cushion in when you give your offer,
though if you go too low, you could be denied. Equally, having fast access to
cash may enable you to negotiate a better deal, so take that into consideration
when you make an offer on a property, too.
There’s a big difference between making a calculated
decision based on knowledge of the housing market, and in making repairs with
the hope to turn a profit. Not every rehab is worthwhile. If you’re just
starting out, choose the simplest projects, and include professional
contractors in your budget. You can test your knowledge in rehabs by scouring a
neighborhood, and making your own predictions of what houses will sell for once
they’ve undergone renovations. You may also have better success if you find a
seasoned re-habber and spend some time working as an apprentice for him.
Fix-and-flips aren’t for everyone, and getting started in the industry requires
real estate knowledge, as well as a solid background in home repair and
estimates. Texas hard money lenders can provide the short-term cash you need to make a deal, but you’ll need to have the knowledge to ensure you’re making a wise investment. If you have these things in your own mental toolbox, fix-and-flips can be incredibly lucrative.
Dennis Dahlberg
Broker/RI/CEO/MLO
Texas Tel: (512) 516-1177
dennis@level4funding.com