You’ve spent at least an hour in the past few weeks watching
HGTV, seeing all of these people flip houses or renovate specific areas of
there homes such as the kitchen or a bathroom.
Have you thought to your self that this is something that you would like
to do? Keep in mind that these renovations are not as easy as they are
sometimes made out to be on a 30 minute episode, but if your in the Denver
market to update or invest your in luck; here are a few tips to keep in mind to
make sure your renovation project is a success.
Know your market- In Denver,
there is a very limited inventory, thus it is a seller’s market. As an investor that means that you properties
are going to be more expensive, as we are currently seeing a 6.8% increase in
property appreciation each month, thus to acquire property and then look to
renovate/flip you may have to have deeper pockets. 2. It’s offer time- when making an offer, remember
that cash is king, especially with investors.
Look to submit full price offers, that meet the terms the sellers are
wanting. Be aggressive and understand
that property you are purchasing. Have
your agent speak with the listing agent, so that your offer can stand out. 3.
TV makes it look so profitable- in most markets,
such as Denver;
with the higher prices it really makes every dollar important. Just because you flip a house does not mean
that you will see a substantial return on your investment. Think of it this way, if you overpay by 10%
on the home, and then find a few thousand dollars of extra repairs that will
need to be completed post inspection, the bottom line and cushion to make money
will shrink very quickly. 4. Know the market part 2- when flipping houses,
the hope is that the market conditions remain the same or improve over the next
few months. Make sure you understand the
trends in Denver,
so that when you go to sell you don’t realize that you purchased at the top of
the market. Key indicators of current
market trends will include average days on market, average sale price, and
total housing inventory per month. 5.
Contractors- The real money can be made in flipping
or renovating through sweat equity that you can put into the project. The more you can do, the less you have to pay
someone else to do, and thus the more savings you have. It is crucial that you learn what each
repair is going to take, and how you can do it.
Especially as you get started with flipping houses, as every dollar is
important, if you can install the laminate flooring versus a contractor you may
save a few thousand dollars. Obtaining
referrals from friends is a great way to find successful contractors for
flipping or renovations.
This list is just the beginning of the tips to consider when
purchasing a property to flip or when doing a renovation project. It is vital that you understand your market
and make sure to ask questions to professionals such as your real estate agent
or contractors before jumping into the projects. You can make a lot of money flipping houses,
but sometimes it isn’t as easy as television makes it seem; so be prepared.
Michael Kane is a Broker Associate at Keller
Williams. He is a member of the Carr Peck & Associates team that is
recognized locally and nationally as in expert in real estate. Locally he is a
member of the Denver Metro Association of Realtors. Nothing brings him
more joy than making his client’s dreams become a reality! For more
information feel free to contact him or call 303-717-9284.
Statistics provided by bankrate.com. Image courtesy of google.com
Author:Jason Peck Phone: 720-446-6301 Dated: September 8th 2014 Views: 683 About Jason: ...
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