When you begin your journey flipping homes, there are some things you need to know, and other things you will want to avoid. We’ve put together some tips on how to sell a fix and flip house fast in Phoenix.
Flipping a home in Phoenix can be a great way to turn a profit, but it is never as easy as it appears on HGTV. We hope our tips and tricks will help you sell a fix and flip house fast!
First You Must Understand Your Location and Market
They say a home’s value is based on location above all else. 60% of the home’s value comes from where it is located on the map. Home prices may vary drastically as you move from neighborhood to neighborhood.
A house that might be a great value in one part of town, may sell for considerably less just a few miles away. Make sure you have done your homework and have a good understanding of home prices in YOUR neighborhood.
You will also want to have a grasp on the demographics in the area. Who is buying? Families, seniors? What are they looking for, and what can they afford?
Don’t Over-Improve The Home
When making improvements to a home you plan on flipping, remember that less is more. There are no guarantees that you will recoup the costs spend to fix it up. Replace things that are not working or that appear very old, but leave it at that.
Do not sink money into a home adding excessive details and upgrades. If bathroom cabinets are old and ugly, replace it with a simple (and cost effective) pedestal sink.
Always keep in mind, that no matter how many upgrades you make, a home will not sell for $500k, when the neighboring homes are going for $150k.
Price Your Home Before Anything Else
Before you sign the papers to buy the home, have the number in your head of what you will sell it for. Be careful not to overinflate this number. You should be pricing low in order to get a buyer and sell the home fast.
Be realistic and stick to your numbers. Do not think that by making a $40k renovation to the basement, you will be able to add $40k to your asking price.
Review all your numbers before getting started, and keep in mind, repairs typically require more money than what you initially plan for, so give yourself some cushion.
Only Drop Once
When you initially price your home, give yourself enough room to drop the price once. Plan to make a significant drop of $5-$10k if the house isn’t receiving much attention at your original asking price.
You will only want to drop the price once. Dropping the price more often can make the house appear as if something is wrong with it, or that you are desperate to sell.
Before starting any real estate investment project, it is important to educate yourself and work with professionals you can trust.
- Do the Right Renovations. …
- Price It Competitively. …
- Work with an Experienced Real Estate Agent. …
- Stage It Properly. …
- Improve Curb Appeal. …
- Sell at the Right Time. …
- Market the Property.
Have Professionals Work in Areas You Aren’t An Expert In
The reality TV shows may have you thinking you can do everything yourself, but it’s beneficial to seek the help of a qualified contractor or real estate business— especially if you’re just getting started in this business. A real estate business’s extensive negotiating experience and knowledge of the local market can help you snag a better deal than you may get on your own.
Research Common Repair Costs
Study some basic costs like contractors’ rates and costs of materials like carpet or lumber. Of course, every house and every project will be different, but this will give you a background knowledge to help you budget for your house flipping project. Also, understanding which types of upgrades increase a home’s value the most can help you decide which projects are most worth your investment.
Know Your Financing Options
Research all of the available options and know the pros and cons of each. Will you be paying cash for the home, or will you be using bank financing? Mortgage plans for second homes or investment properties usually have different terms than first homes, so know what you are getting into. Plan ahead with your budget for mortgage payments, utility costs, and all planned repairs and upgrades during your flip.
Find a House With Good Bones
The best candidates for flipping are structurally sound and just need a few updates. Homes that have bigger issues — like mold, structural or roof problems, or major electrical or plumbing issues — will cost you more money and time. They’ll quickly eat away at your profits, too.
Don’t Skip a Professional Inspection
This is one expense not to skimp on. Before you buy a home, be sure to have a professional inspect everything in the home. The inspection can uncover hidden structural issues that may not be visible — and would be a costly fix later.