There is a whole market out there for houses on sale which are in need of some reparations. Of course, this is a lengthy process and is a lot more exhaustive than simply making a few simple fixes. Television shows can also give off the misconception that fixing up a house is fast, fun and profitable. But this process really requires knowledge, planning and expertise if you want to be truly successful. In this article, we will give you some top tips on how to be successful in buying, fixing and selling a house.
Wholesale real estate investing
This process, called wholesale real estate investing, is a form of real estate investment strategy in which an investor purchases a property not with the intention to use it, but rather with the intension of selling it for a profit.
These investors concentrate on the purchase and resale of either a singular property, or a group of properties. They will attempt to create a steady flow of income through engaging in frequent investments.
Buy low and sell high
Investing in a house and revamping it is like any investment. Essentially, you want to buy low and sell high. However, unlike other investments, instead of adopting a buy-and-hold strategy, you want to complete the transaction as quickly as possible so that you can limit the period of time during which your capital is at risk.
This is because for every day that passes, you will be losing more money on a mortgage, property taxes, utilities, insurance, and any other costs which are associated with homeownership.
Play it safe
If you are just getting into this market, you should limit your financial risk and maximise your return potentially. To play it safe, you should not pay too much for a home, by knowing what it’s worth. You should also make sure you know how much the necessary repairs or upgrades will cost prior to you buying the property.
Things to ensure
There are some key points you should ensure you have in place if you are going to make this investment. You need to ensure that you have enough money because especially if you are not an expert, you may not know that real estate can be incredibly expensive. It is difficult to make a profit, particularly if you are planning on fixing up the house.
You should also ensure you have enough time to properly put effort into this venture. It may take significant time to find and buy the right property, then to repair the property. If you have a full time job, then you may need to pay somebody else to do the work, which will only further take away your profit.
Educate yourself on the market so that you are not going in completely naively. One useful rule to know is the 70% rule which states that an investor should pay no more than 70% of the after-repair value of a property, and then subtract the repairs which are needed.
In short, there are many important factors to consider. If you would like more advice, seek help from the experts in the market and get in touch with our friendly team at FastCash4Houses. We are here for all of your buying and selling needs.
