Finding an older home and making the choice to restore the property can be exciting but very nerve-wracking. Remodels are often filled with surprises that can stretch your patience and your budget, which is why going into the process carefully is important. Here are some important things to take care of before you flip a home.
1. Learn About the Property - Before you invest in a property, learn as much as possible about the home and its history. Check real estate records, property tax records, and permits filed with the city for upgrades or repairs. If possible, walk through the home and have a home inspection performed. Professional home inspectors will be able to check for issues that exist, helping you to gain a better understanding of what kind of investment would be involved when upgrading the property.
2. Meet With A Fix-and-Flip Lender - After you have a rough idea of what the property would cost to rehab and what it is currently listed for, sit down with a lender who offers fix-and-flip loans. This specialized type of loan is designed as a short-term loan to give investors the money they need to improve properties without digging into their own pockets.
Typically, fix-and-flip loans are designed to be repaid within one year, and the fees originated through the lending process may be paid with the proceeds from the sale of the house. Fix-and-flip loans are incredibly helpful when you need to purchase a property fast, as is generally the case when you are bidding against others for a stake in a property. For instance, when you purchase a fix-and-flip home, you may be working with others and competing for the bid in a public setting, which can be stressful.
3. Establish A Timeline - After you have the money in place to handle a project and you understand the property, talk with your contracting team about the timeline of the project so you can estimate expenses. Keep in mind that the longer the home is off the market, the more expensive the project will be since you could be missing out on returns.
Try to establish a set timeline and work with your team to keep the project on track as you move through the process.
If you are thinking about flipping a place you have recently purchased, turn to a fix-and-flip lender near you. Also known as "hard money lenders," these financiers specialize in giving investors money when they need it for fair prices. When you meet with professionals, have your paperwork and financials ready to streamline the process.