We buy houses in Orlando. The sunshine state has always offered up some of the most desirable real estate in the country. For those passionate about real estate investing, flipping properties has been a well-established and proven method to make very generous returns on your investment. For clarity, flipping property refers to the process of a real estate investor buying a distressed property, often that are priced well below what they would appraise too. After covering the costs to repair and refurbish the property, the investor “flips” it, selling it at a significantly higher price. If done correctly, flipping properties can lead to substantial profit margins, even after factoring in the costs of buying and refurbishing. Continue reading as we discuss how you can start flipping properties today in Orlando, FL.
We buy houses in Orlando for a fair cash offer, so, if you need to sell a distressed Florida property fast and hassle-free, Your Trusted Home Buyer is one of the best companies to assist you. We can help you sell a property in foreclosure or with serious code violations in as little as one week and make a fair all-cash offer on the home. Contact us today to learn more about how we can help!
Finances are Required
Regrettably, all those infomercials, ads, and articles claiming you can flip houses with no money are nothing more than gimmicks. Flipping houses is not a ‘get rich quick and easy’ scheme; a sizeable investment is required to engage in the process. Most bank-owned, short sale, and properties with open violations are sometimes required to be acquired and held for a minimum of 30 days. Other expenses like maintenance and utilities will sneak up on you while you repair and attempt to flip the property. Hard money lenders are a viable option to obtain a good chunk of liquidity, but it is profoundly unlikely your flip project will be fully funded.
Follow the 70% rule
The 70% rule is part of the gospel when it comes to house flipping. It refers to the idea that no investor should pay no more than 70% of a property’s ‘after repair value’ or ARV. As the name suggests, the ARV is the property’s value after all repairs and improvements have been made. There are strong beliefs that the 70% rule is requisite to turn a profit on the transaction, and you can use a simple formula to calculate:
- Maximum Offer Price= 70%(ARV)- Repair costs
For example, if your home has an ARV of $300,000 and will cost 60,000 to repair, the maximum offer price would be $150,000.
Worst House- Best neighborhood
Location, location, location! Almost all of us understand how important location is in the real estate industry; the same applies to flipping houses. Remember, your ultimate goal is to sell the property, so before buying, consider if you would want to live there or not. If your answer is no, remember it may not be easy to sell it later! A rule of thumb most investors follow is to buy the worst house in the best neighborhood. Good school districts and a family-friendly atmosphere are perhaps at the pinnacle of attracting buyers!
Attend Bank auctions
Banks list their properties quite aggressively to entice a sale, so for those seriously interested in flipping homes, a bank auction is an excellent place to start.
Sign up to the MLS
The MLS is a massive database of properties with all the pertinent information you would need to analyze and decide what properties you would like to target to flip. However, the MLS can be competitive, charges a fee, and tends to be quite tricky to navigate, but certainly, a strong idea if you like researching and evaluating your investment choices.
