Are you thinking of tackling a house flip? You have probably seen the shows on TV. HGTV makes this process out to be super smooth and easy. It can be sometimes, but not always. It is not all rainbows and sunshine when running a flip. Even if you were able to buy for a really good price, margins can still creep up. Depending on how the flip goes, you may find yourself saying I need to sell my house fast in Philadelphia to cash out of this project. In any case, of course, when done correctly and thoroughly, flipping a house can be an incredible business move to create cash that you too can use to help fuel your real estate business or supplement your salary from your normal everyday employment. We are about to dive into the 4 Key Factors that can make or break flipping a house.
Obviously, you must consider how you are going to pay for the property and the renovations. You have most likely previously thought about all the repairs you will do to change the property.
There are a few things that are not all that conspicuous and for me, a couple of the things that I wish I had placed much more idea into before beginning the procedure. It’s never too early to begin planning for the what ifs that can arise. A few things to think about before jumping into a flip include:
- Renovation Timeline
- How Much to Repair
- Holding Costs
- Plan for the Property
Time Invested in the Project
One thing that I assume individuals do not generally think about is how much time you should be there at the project. This should be one of your first items to consider because you don’t want to jump into a project before knowing you can or cannot be there if you need to be. You should be nearby or someone in your group should be nearby for when things pop up during renovations that need attention. We buy houses in Philadelphia, but we sometimes have more trouble with ones in nearby counties. Even if you don’t plan to be there too often, someone should keep an eye on the project a few times each week ensuring all is well and ensuring that contractors are doing their jobs.
Double check that the contractual workers know for a fact that you will be available if they need you. This helps keep them accountable during the project and keeps things running smoothing during your house flip.
In an ideal world where you have lots of time on your hands, it is very helpful to keep an eye on the project each day if possible. Especially if it is your first project! Make sure to keep up strong communication with anybody working at your home and consistently make trips to get a direct look at the progress of the renovation.
Lastly, think about this. If you are absent to ensure things are going as planned at that point it is definitely possible that nobody else will be. A scary thought, I know. I have seen it more than once where a property was left unattended and individuals with awful goals exploited that and that is clearly not something that you need while you are chipping away at your task.
How Much to Actually Renovate
Each project is always very different, even if it looks like a typical row home in Philadelphia. There is continually going to be something unexpected pop up! Do not be afraid to get second opinions and ask for help on things you have never come across before. There is most likely someone out there that has seen the issue that you are dealing with before.
Truly, there will be repairs that you see that simply need to be fixed, particularly if it’s a security issue or something like that. Those are things you’ll need to burn through cash on that are outside of your initial plan. In any case, as simply adding another thing to make it that item prettier, you truly need to ask yourself, “Is it justified, despite all the trouble?” Are you spending your time and your money is the most efficient way? Don’t get sucked down the rabbit hole of your renovation project.
Is it easy to say that you are going to see that dollar-for-dollar return for fixing that additional item or is it truly going to help you with selling your home? You will need to do some examination on the things that increase the value of a house and ensure that is the place you put your cash. You generally need to ensure that you will get back more than you put in. A few things that you might need to concentrate on are the kitchen, the bathrooms, foundation, and roof.
This cost is a common one that folks forget to account for. Property holding costs are the costs an owner must pay on a property during the time they own it. We will in general touch on the cost to purchase the advantage and what amount the recovery costs will be, yet what are altogether different expenses related with possessing a property?
You should know about and ensure you factor into your numbers things like the premium that you’re paying in the event that you obtained the cash, property charges you will be paying while you own the property, the protection costs for the property, and your service bills.
Each one of those bills are going to keep on running while you hold the property, show the property to buyers, and keeping in mind that you are trusting that the property will close once you’ve found a reliable buyer. At the point when you include those things up, it can seriously be a renovation cost number that eats into your primary bottom line.
I would recommend, for future projects, try to remember those numbers and make sure to add them into your financial plan for the renovation project and estimated costs. There are generally consistent items that come up unexpectedly when you flip a house, and you don’t need your holding expenses to be one of them.
Selling Your Property in Philadelphia
Since you have completed your project, what is the most ideal approach to selling the property?
Many individuals imagine that it is a smart thought to sell the property “Available to be purchased By Owner”, and keeping in mind that this can be a long procedure and you’ll need to set aside some cash on commissions. You must figure out whether you are the best individual to market and sell this property. Do you have any experience in selling a home? Is it true that you are OK with all the paperwork? Do you have the time to market and show the property varying? Take a few pointers from the Selling Your House By Owner Guide.
At some point what you would pay in commissions can be made up by employing the correct real estate agent to rundown, market, and sell your property at the best and highest price. Not always an easy task. On the off chance that you decide to hire a real estate professional, see it as a business exchange and that you are recruiting this individual to handle the entire process for you. They are the professionals, don’t be afraid to let them take the wheel. Everybody has a cousin or a companion from work that is a real estate agent or works in real estate “on the side “, however is this the best individual to recruit for your business? Vet who you hire, and make sure they have lots of experience.
Utilize resources like Yelp and Zillow to find a good fit for the property you are trying to sell. Don’t go with the bottom of the barrel.
If you are considering starting a project, flipping a house, or selling your property in Philly – and have questions – call us anytime at (215) 326-9208 fir real estate advice, tips, and best practices.
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