House flipping has continued to thrive in recent years, and the potential profits have attracted many investors to the marketplace. While the potential profits are a big draw, you must do your homework before beginning a project in order to ensure the highest probability of success. A few of the tips listed below should help when considering a new real estate investment.
Choosing the right house to purchase and flip is the most important decision to make when beginning to plan your investment. According to an article from realtor.com, investors should look for homes that have “good bones” meaning that they are structurally sound and have a lot of potential to be fixed and resold as good quality homes to make a sound profit for the real estate investor. Having a good base to build around will help to make the flip easier.
Once you've found a good investment property, you’ll need to determine how much your’re willing to pay for it. Running comparables for other similar properties that are in the same neighborhood can provide a good sense of what the home would be worth once repairs have been made. The After Repair Value or ARV is another great estimate for what the home will be worth after the rehab is been completed. A good rule of thumb is to keep your purchase price and rehab budget below 70% of the ARV.
Finally, as a savvy investor, you should network and find out who the best local contractors are and who may be the best to tackle your project. You should ask for estimates on renovation costs from contractors and get references from previous clients who can attest to the quality of the contractor's work. Hiring a good quality contractor goes a long way in helping the entire flipping process go as smoothly as possible. You should also budget conservatively and plan for any unseen extra costs that may occur during the flip to give flexibility should these problems arise.
Flipping houses can be very exciting and, when done right, very profitable. By picking the right property, estimating expenses correctly, finding the right contractor to do the work, and having a sound estimate of the resale value of the property once the rehab is completed, you can put yourself on the path to great investing success.
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LYNK Capital is a fast-growing hard money lender offering hard money fix and flip loans, rehab and renovation loans, construction loans, and rental property loans to real estate investors. LYNK Capital is a direct private lender that offers lending solutions to real estate investors, contractors, builders, and developers.
Hard Money Fix and Flip Loans
LYNK Capital is your fix and flip lender. We offer hard money fix and flip loans for real estate investors. Fund your rehab or renovation project quickly with competitive interest rates and origination fees. Faster than bank financing with more flexible loan terms. Purchase and refinance options available.
Hard Money Construction Loans
Hard money new construction loans for builders and developers. Fund your new construction project quickly with competitive interest rates and origination fees. Faster than bank financing with more flexible loan terms. Purchase and refinance options available.
Single-family rental loans for real estate investors. Borrow up to 80% of your property value. Finance your investment property quickly and easily. Rental property loans can be used to purchase your property or to refinance your existing portfolio. Cash out loans are permitted.
Where Does LYNK Capital Lend?
LYNK Capital makes hard money fix and flip and construction loans in: Alabama, Connecticut, District of Columbia, Delaware, Florida, Georgia, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Missouri, New Jersey, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and West Virginia.
Get a hard money loan for your investment property today with our online rate quote and pre-approval.