Is Flipping Houses Up Your Alley?

Home / Home Buyers / Is Flipping Houses Up Your Alley?

Is Flipping Houses Up Your Alley?

 What a Great Time to Buy and Flip Homes in Orange County!

 

These days, you’re looking for ways to make every spare dollar work hard and provide a great return, right?  A diversified investment portfolio is always wise – to protect you from being over exposed in one particular market segment.  So, you’re thinking that it would be a great time to dip your toes into the Real Estate Investing arena.  Buy low and sell high is the best advice, correct?  Get a smokin’ hot deal on a real beater of a home, then splash on a coat of paint, slap in some granite, lay down some new carpet, and sell it for a huge profit.  Easy peasey, lemon squeezie.  You’re singing all the way to the bank.  Slow down there, Gekko.  Let’s go through the top 5 considerations in flipping houses in Orange County today.

What Does It Take to Be a Successful Home Flipper? 

Here’s what you have to know: 

1. Know the Orange County Real Estate market.  Cold.  What’s selling now?  What cities and neighborhoods are selling fastest?  What price range(s)?  Condos or Single Family homes? What condition – upgraded, original, or As Is?  Single level? 

2. Know the numbers.  What is the TOTAL amount of money you have available for this investment project?  Do you need to borrow money?  How much, at what rate, and for how long?  How much will you need for repairs and upgrades?  What is your monthly carrying cost (principle, interest, property taxes, Home Owner Association dues, Home Owner’s Insurance, utilities, gardener, pool maintenance,…)  What’s your required net profit percentage of investment, after purchase, rehab, and sales costs?  What your built in margin of error? There’s more, but you get the idea, yes? 

3. Know the condition. Know as much as you possibly can, as quickly as possible ,about the home you’re targeting to buy and flip.  Get your Home Inspector, Termite Inspector, General Contractor, Roof Inspector, Painter, Electrician, Pool Guy, Carpet Guy, and Granite Guy out as quickly as possible – even before you make an offer.  Better yet, keep your inspector on retainer, just like you would a good lawyer.  Get him to go with you when you evaluate the final candidates so he can kick the tires and give you a sense of the scope of the repairs.  Keep your General Contractor on retainer, as well.  Get some estimates for repairs and upgrades up front.  Run the numbers so you can make an informed offer. 

4.  Know the timing.   Time is money, right?  How long will each project take to complete?  Are there any contingencies between projects (does the painting finish before the flooring is installed?)   Will you have a daisy chain of contractors lined up like so many dominoes waiting to tumble down if one is late?  Build in penalties if your contractors go over time or over budget. (Call me immediately if you are able to get this done – I have a trophy for you!) What’s your target date for re-listing the home? 

5. Be patient.  Don’t force a square peg in a round hole.  If the numbers don’t work, walk away.  If there’s a bidding war and the price goes up higher than what makes sense for your targets, stop bidding.  This is a business decision, not an emotional attachment.  There will be another one.  There always is.  Good things come to those who wait.  And to those who have all their ducks in a row. 

Call me if you want to crunch some numbers.  949-678-3373. I’m Leslie.  Just Keeping it Real in Orange County Real Estate.

Leave a Comment

Contact Me

Have a question or comment? Send me an email and I'll get back to you, asap.

Not readable? Change text. captcha txt

Start typing and press Enter to search