The Dallas-Fort Worth area is now the top market for commercial investment properties in the U.S. As DFW becomes a hub for startups and home to an ever-diversifying employment base, the population is expected to grow at double the rate of the overall U.S. population. That means the market for house-flipping is heating up as well, and more and more people will dive headfirst into flipping a home to get their share of those profits.
It may be tempting to think about house-flipping the way they show it on TV - a good investment for a quick profit. And while that can be true if you’re experienced and financially shrewd, jumping into an investment property for the first time might leave you feeling in over your head. The reality is that successful house-flippers rely on a team of experts to help them get the most bang for their investment bucks, and one of the most versatile and valuable players on that team is a real-estate agent. An experienced realtor will help you through every step of the process to avoid the pitfalls of house-flipping. They’ll help you with everything from picking the right home to flip, to remodeling, pricing, and selling it.
Before you even consider getting into a house-flip, you need to determine whether the market conditions in your area are right for it. In fact, in most areas of the country, the average flip amounts to a minimal profit or even a loss for the investor. A realtor knows the local market and its dynamics intimately, and will be able to tell you if you’re beating a dead horse before you even start the race. That said, by nature, investing in real estate is risky and speculative. It depends on constantly-shifting market conditions, and factors like mortgage rates, fluctuating inventory supply, and the seasonal swings of home sale prices can change the outlook of your profits during the course of your flip.
Say that the market conditions are favorable in your area at the moment, and you want to make the plunge. A realtor will help you select the right investment property - one that is in good enough condition to leave some breathing room in your budget and can be attractively remodeled to appeal to buyers in your area. Choosing the right investment property is the most crucial step in the process; getting any of the initial numbers wrong can severely damage your profit margin down the line. Your realtor will help you create a budget that includes not just the price of the as-is property and its remodeling projects, but hidden costs such as taxes, utilities, building permits, and other fees.
You’ve chosen the perfect investment property, and now it’s time to make repairs and remodel. Should you slap a fresh coat of paint on all the walls? Replace the old plumbing? Remodel the whole kitchen? A realtor will know which remodeling projects would be most worth your time, money, and effort for the house to sell quickly and for more money. Your realtor will also have connections to reliable contractors and bargain retailers for flooring, fixtures, etc. When you’re flipping a house, the bottom line is always return on investment. The name-brand kitchen faucet might not add to the value of the home if you can find something just as attractive at a lower price.
Finally, once your investment property has been remodeled, the realtor’s role switches again to marketing expert. Your real-estate agent will help you time your sale correctly and determine a listing price to match the current market conditions. It might be worth waiting to sell if the market dives off a cliff during your renovations. Your realtor might even advise you to rent out the home for a year or two rather than selling right away.
With so much time, effort, and money at stake, it’s worth consulting a knowledgeable realtor experienced in house-flipping during every step of the process. We here at Housed are ready to assist you with your investment projects so you can stay on track, make the best decisions, and ultimately get the most out of your sale.