Basics of Flipping a Historic Lakefront Home in St. Catharines, ON
House flippers will look at properties that other buyers are usually uninterested in purchasing. They are more interested in cheap houses for sale, even if they are distressed, as long as they have good bones. Some house flippers prefer purchasing properties that are finished, as they will buy the property and bring it up to the standards of what a homebuyer will want. Flipping houses is different than other types of property investments, as house flippers buy the properties intending to resell them quickly.
In this article, we will discuss the basics of lakefront house flipping in St. Catharines, ON.
1. Your Acquisition Costs Should be Calculated
The goal of house flipping is to sell the home for more than it costs to purchase and renovate it. You don’t want to be putting too much money into a property that needs a renovation, and it is important to be realistic about your renovation finances and skills. House flippers can opt for cheap homes to sell. Some factors should be kept in mind when you are considering how much money you will put into a property. Consider how much you can expect to make from selling a refurbished home. Calculate the total purchase price and repair costs, closing, back taxes, and holding costs, as well as the cost of a real estate agent you hire.
2. Go with the 70% Rule
A successful house flipper is going to stick with the 70% rule, a formula for success that can be confusing for first-time home flippers. This rule means that the house flipper will pay 70% of the ARV, aka the after-repair value, when purchasing a property, subtracting the cost of repairs. With this simple equation, you will be able to easily figure out how much money you need to be able to buy a house and how this can differ from. What you will need for ready-to-move-homes.
3. Secure the Financing for House Flipping
There are many ways that you can finance a house flipping, and taking out a loan is only one of them. It is possible to begin house flipping with no money. There are many different kinds of long-term and short-term loans that you can take out, with their own sets of pros and cons. You can take money out either through loan businesses or private lenders. Some loans that can be taken out to flip a house will include the following:
- Hard money.
- Home equity line.
- Investment property line.
- Cash-out refinance loan.
- Bridge loan.
- Permanent bank loan.
4. Team Up With a Professional House Flipping Realtor
Before jumping into flipping houses, you will need to have a good plan in place. Successful house flippers have plenty of knowledge of the local house-flipping market. It is important to connect with a real estate agent who can provide valuable insight. Teaming up with a reliable realtor can help you during the process of flipping a home, as a realtor has a large amount of experience in the housing market. They can help you select the lakefront property that you want to flip to sell for a profit. Realtors offer insight into how to renovate and how to find great deals off-market.
5. Ask All the Right Questions and Do Your Research
Ask as many questions as you’d like when looking at properties that will catch your eye. When talking to an owner, find out what you can about the property. Find out all you can about the location of the property and the community. How many schools are nearby? Is the home within the floodplain? What amenities are near? Ask your professional real estate agent about older homes for sale, particularly cheap homes. These types of properties can be your best answer to getting your start in flipping houses. These particular properties can provide a great balance between investment, the initial cost, profit, and repairs.
6. Prepare to Go Over Budget But Prepare Carefully
When budgeting for a property to purchase, it is important to know how much money you will be required to spend. Remember, this will be an investment. The better that you can plan, the better the outcome will be. It is rare for a project to go as planned, and you can expect to go over budget. You should be prepared for obstacles to arise and aspects of the renovation to cost more than you have anticipated. Keep a budget, a timeline, and a project scope. This doesn’t have to be complicated, but it can be as accurate as you can make it. When planning a budget and estimating the profit of the project, be sure to take into account taxes that will need to be paid.
7. Allow for Enough Time to Flip a House for Profit
The time it will take to flip a house will depend on several different factors. This will take into account the experience of a house flipper and the amount of renovation that a house will require. Flippers with great connections can put a house back on the market in three months. For others, it will take longer. House flippers will look for the process to take as little as a couple of months. If the seller is motivated, they will have an interest in fixing, acquiring, and dropping the property as quickly as possible.
Bottom Line
House flipping can be a stressful time, and there is a lot to learn about the art that can help others remember to plan calmly, thoroughly, and patiently. Get helpful input from others you know who have completed a successful house flipping project or a professional real estate agent who has specialized in selling a house that was flipped. Continue building a network of professionals who will help you to reach your goals. Most importantly, make sure to go into this project with a solid plan. Trust the real estate professionals at Hendricks Team Realty to guide you in finding and settling down in the home of your dreams in the many beautiful, thriving waterfront properties that make up St. Catharines, ON, today.