Home flipping could be a lucrative and fast paced business, not to mention the people on HGTV make it look so easy! But there’s a lot that goes on behind the cameras to make sure a real estate investment doesn’t just look good, but also feels good in your pocket after it is bought. Here are 3 things to do before you begin:
You will need to know about your market, loan structure and payment expectations, as well as be familiar with design trends. Ways you can become educated can include going to continuing education classes (typically for realtors or lenders, but offer valuable information and insight into the market), start a relationship with a realtor to get quality information about the market and predicted trends, or even get in touch with a lender that can provide insight into different loan options and ways payments can be structured.
Choose the best lender for you
Just like choosing a friend, you want someone who wants to see you succeed, and keeps your interests in mind. At Capital Fund I, we want to see our borrowers succeed, and we love seeing the completed results of our borrowers. By having a lender that supports and appreciates your hard work, you are able receive the financing that best suits your needs, as well as build a relationship that can offer you more opportunities.
Be Familiar with the Industry
This one almost plays into number 1 “Educate Yourself”, but also includes building relationships with all parts of the flipping process. Let’s go through it in terms of who you may meet starting from your search for the property:
- Wholesaler/realtor finds and sells the property
- Private money lender provides acquisition financing
- Title company documents and notarizes the purchase
- You meet with your contractor or vendors so you can begin rehab of the home
- You list the sale on market with a real estate agent or as an agent yourself
And that doesn’t even include the number of people you may interact with each time! Once you know what goes into each part, and how it all works together, you’ll be able to time things out perfectly and have a smooth sailing production of home flips.