Are you on the lookout for a way to make quick profits in real estate? Then, Flipping Houses in Texas might just be the right way to go for. But, here you should note that making money by flipping houses is not as easy as it might seem on TV.
Rather House Flipping requires a lot of hard work, patience, and expertise. But once you know the nitty-gritty of it, house flipping can well be a potentially lucrative short-term real estate investment.
House Flipping- What is it?
Real estate investors who are associated with house flipping purchase the property at discounted properties, make the needed repairs and renovations, and then sell the property at a profit. To say it differently, Flipping Houses in Texas follows the classic investment strategy of buying low and selling high.
Flipping Houses in Texas is considered a potentially profitable way to invest in real estate when the demand for homes is more than there is supply, and that is what is the scenario in many real estate markets today.
Most of the homeowners out there don’t have the time, energy, knowledge, or money to do their repairs and find deals. But if they find a home where all the work has already been done, then they will be more than willing to pay a good price for that home.
5 Essential Steps to Flip a House
Flipping Houses in Texas is slightly different from purchasing a turnkey rental property. You need to have a comprehensive understanding of the market trends which will enable you to purchase low-priced houses, accurately estimate the cost of repairs and the approximate time it will take, and also predict the price at which you can sell at while still ensuring that you are making a profit.
Here, we will be taking a look at the five essential steps that you need to follow while flipping a house.
1. Market Research:
It is very easy to say that we will buy at a low cost and sell at a higher price. But executing the aforementioned thing is not that effortless. If you are looking to make a profit while Flipping Houses in Texas, you need to shortlist a property that offers enough upside potential even after the cost of repairs has been factored in. And properties that are listed under Probate Sale can just be the right thing for you here.
2. Estimate Repair and Update Costs:
If you want to become a successful house flipper, you should focus on homes that need inexpensive cosmetic repairs and that may include paint and flooring, some updated features like sinks and faucets, and brand-new stainless-steel appliances. In this way, it becomes pretty easy to estimate repair costs versus trying to fix structural problems like a cracked wall or foundation.
3. Arrange Financing:
When you are paying for Flipping Houses in Texas, you have two good options in your hand. You can either use all of your cash or you can also opt for a short-term hard money loan. You will also find that traditional buy-and-hold real estate investors generally employ leverage to increase the overall return on investment.
On the contrary, what the house flippers do is that they try to move in and out of a deal quickly and always try to avoid accumulating debts or making interest payments that could eventually eat into potential profits on the upside of the flip.
4. Network with Contractors:
You can expect better pricing from contractors, handymen, and material suppliers as they know you will be sending a constant flow of business their way. So, once you are successful in creating a solid network of cost-effective and trusted contractors, you can significantly reduce the risk that the cost of repairs will be higher than expected.
5. Purchase a Property to Flip:
Once you are done with thoroughly analyzing the local real estate market and have located a property that is expected to make a good flip, like the properties that undergo Probate Sale, the next step is to put the property under contract. Here, you should keep in mind that since you are making an offer at a below-market price, sellers will expect a purchase contract with a fast close of escrow and very few contingencies.
So, are you thinking of Flipping Houses in Texas? Then, we would say that it’s best to play it safe and err on the side of caution. We would suggest that you start with a house that comes under Probate Sale, as a majority of them only need cosmetic repairs and are in a market that you know extremely well.