Fix and Flipping is the best choice of real estate and that may not come true with ultimate profit to all but on practicing strict rules for real estate while fix and flip will desperately fetches ransom of profit to gain in every project. Fix and flipping real estate includes more home work before implementing the project to happen. Above all, it takes the importance to know what all the needy steps that are necessary to be taken before inaugurating the real estate business and to perform the fix and flip process in house or any building.
Initials of fix and flip real estate:
Anybody who tends to inaugurate the fix and flipping real estate business should abide by undertaking rules and regulations. Realtor who wishes to invest in any property should investigate all the legal and illegal liabilities the building owes. He or she must look through the property once for all whether it is capable of investing and find with all the legal requirements to fix and assured for gaining profit after fixing and flipping the same.
Influence of 70% rule:
Realtor who invests in the building or house would liable to buy or sell the property on the basis of 70% rule. This will enable the investor to know how he should pay for the property once it is fixed and tend to flip. The 70% rule illustrates the theory of fraction and measurement involved in the investment and the actual pay that is supporting to remit by the investor. The formula is as follows:
Purchase price of property = (after repair value – repairing cost) x 70%
The barometer is more often used by the real estate investors while buying the property followed by fixing with needed or cosmetic repairs. To explain in detail, if the realtor buy a building for $100,000 and fixes it with the expense of $25,000 and finally flip the house for the after repair value of $ 1,50,000 then right from this value the purchase price of the house is estimated. Approximately, $80,000 is spent to buy the property as per the 70% rule. The particular barometer is used extensively by the realtors in the process of real estate in various aspects and parameters.
Many questions arise regarding the possibilities of undertaking the process of fix and flip houses. Is that possible and brings positive results with average earnings? Is it necessary to have insurance knowledge and ailments regarding owning the house? Does the help of public adjuster takes part in flipping houses?
All the questions are need to be answered and the proper expertise will explain everything without films of queries and analysis. Before getting into the process of buying any building, take a deep analysis regarding the property and enquire regarding legal prosecution about the house. Prepare a list of numbers surrounding the house that are willing to buy the house. This may helpful in sorting out the buyer in different means.
Estimate the value of the building and calculate the repairing estimation, if necessary. Avoid unnecessary repair expenses and other cosmetic expenses as they may not prove to be profitable. Differentiate the repair cost in accordance to the whole estimation because while fixing a property many wages arise like insurance expense, temporary owning expense, unknown expense, essential repairing cost, etc. It is necessary to subtract all these expenses from the after repair value and multiply the resulting amount with 70% to get the accurate purchase price of the property. Sometimes this may exceed expectation and meet out to be over the limit and that is ultimately unfortunate under such conditions the realtor or the investor may have to come front giving up profit percentage.
Earning percentage of the house flipper is something reasonable and decent to say wide. According to the statistical report, the house that are flipped approximately for $ 100,000 to $ 2, 00, 000 will show the return of about 54% making the deal more profitable and encouraging the novices to the field. This statistical report is applicable to the financial year 2017 March. This sounds better to be the best return profit earned as average salary of the house flipper. Besides, flipping the house being tidy and profitable one, the realtor should meet the requirements and queries of accessory expenses. At this point, the role of public adjuster is vital and talks for the purpose of both realtor and the investor. He/she may speak voluntarily for the purpose of insurance claim in the place of needy.
Fix and flip business will be the successful one when the investor avoids five important mistakes while flipping house. Because of these mistakes, the flipping the houses may flops and leads to ultimate loss instead. Thus, the ultimate don’t’s are needed to follow while flipping houses.
- No huge investment
- No wastage of time in investing
- Inadequate knowledge about property
- No mishandling in repairing session.
- No compromise in deal.
Just by following the above said rules, quite desperately the fix and flip houses may be fruitful and propagates effective and extensive profit. To explain in detail, it is advised not to make heavy investment in any property without knowing the actual value of the after repair value of the same. Investors are asked not to waste their time in fake and underestimated property. Many television shows are casting everyday with well dressed investors narrating their fake stories of profit gained in fix and flip housing property but investors are asked not to trust the stories without actual evidence that proves.
It is not as easy as what is forecasted in television shows probably the investors and realtors are need to do best home work to execute the best fix and flip process of property. Desperately, now and then the investor will gain more than what he/she actually invested. In spite of disadvantages existing, there are positive advantages overlapping the art of fix and flip real estate. Online sites are plenty demonstrating the process to be effectively profitable.