A Positive Spin on the Current Market
Real estate agents and Realtors® alike are considered essential businesses. While the media, experts and gurus alike discuss a potential economic decline we’re choosing to focus on the positive. Here’s some potential we see for the residential market.
Our good friends and Realtors® located in the Midwest just posted three new listings this past week and received an accepted offer on a listing in just under a week on the market. The key? Affordable options. The job market will play a heavy factor in forcing people to relocate for new opportunities. The result will make house hunting not so much a luxury, but a necessity.
We’ll likely see the most affordable options being scooped up off the market first. This is great news for investors and flippers alike. Make smart design decisions that provide functionality, aesthetic and keep your overhead costs low. Remember to market your listings across all your social media channels. We’re seeing a dramatic increase in social media usage while we all practice social distancing.
Contact us for assistance funding your next residential flip.
Common Mistakes while Flipping Houses
Flipping houses is an exciting venture that can make you a bundle. However, if you aren’t careful, it can also cost you. Here are some hot tips to keep your expenses low and profit high.
- Trust your Realtor- After repair value can only be assessed by local realtor, not by online tools. Trying to determine the After Repair Value of a home without consulting a realtor is impossible to do accurately. Although online tools such a Zillow may be a convenient place to begin your research, be sure to consult with a professional local realtor in order to accurately predict how much value can realistically be added.
Working with a local realtor also has the advantage of saving you time, which is key in a competitive real estate market. The longer you hold onto a property the greater the chance that the property’s value fluctuates from the original ARV, which increases the riskiness of your project.
2. Going it alone-While it may be possible to flip a house yourself, working with a team will allow you to leverage the experience of others, shortening your learning curve and allowing you to avoid major problems. Your team should include a real estate attorney, an accountant, an insurance agent, real estate agents and contractors.
Although hiring professionals may cost more up front, it can save you a bundle down the line by helping you avoid common pitfalls. For instance, working with a CPA can allow you to keep your taxes as low as possible while staying on the right side of the IRS.
3. Hold on to property for too long-The longer you hold on to a property, the higher your soft costs will be. Soft costs are the costs associated with holding onto the property such as interest on loans and real estate tax. Holding on to a property for too long can cause your soft costs to rise by thousands of dollars. A $100,000 loan financed at 10% will cost you $5000 in interest after six months, $7,500 after 9 months and $10,000 after a year. Electric bills, gas bills, property maintenance, all these expenses accumulate and can add thousands on to your expenses.