Fix and flip investments often have a popular draw for both new and seasoned real estate investors, and for good reason. It’s a great way to expand your investment portfolio and take advantage of a really great market with booming communities. However, flipping homes may not always be profitable, depending on how much work and strategy it may take to get a property in good selling shape, and whether you can even get the property at the price you originally wanted.
Finding success with fix and flip projects in a seller’s market can be tricky but getting started on the right foot is essential for not losing money, or worse, losing out on a whole investment entirely. These are some things worth considering when looking to flip in such a market.
Use the right platforms to find the best investment properties
A seller’s market means there’s great competition for most properties that go up for sale, and this can mean potentially blowing through your budget to secure a fix and flip property in the first place. However, using platforms that have a database of foreclosed or repossessed homes can make property searches faster and easier. Properties can be assessed by looking at the listing price, occupancy rate, cash-on-cash return, or rental income, creating a more streamlined process to find properties that meet your expectations.
Make your offer simple
Contingencies like home inspections, title searches, and appraisals are common requests when offers are made on properties, however, they can also be viewed as potential opportunities for deals falling through. As a result, simpler offers that don’t ask for too much and have a lower risk of crumbling apart are seen as more appealing options for sellers to consider. In a seller’s market, make your offer more competitive by reducing the contingencies and asks. This, of course, can be a big risk if you consider the possibility of a property being in bad shape and accepting it as such when inspections are bypassed.
Eliminating contingencies is just one way to make an offer attractive but consider the different ways to make yourself the most appealing buyer. Being considerate of the seller’s schedule and offering flexibility on the closing date can make you stand out from other potential buyers. Consider, also, making a larger down payment to show you are serious about the deal. If the seller’s terms are reasonable, agree to them and avoid complicating the transaction for both parties.
Flip quickly to get back out there
Of course, once you have officially bought a property, get down to business and begin the work immediately. As is always the case, make sure you stay within your rehab budget, but just as important is sticking to the timeline. Under ideal circumstances, you’ll have the ability to turn the property back around while the market continues to remain on the seller’s side, meaning you can really maximize your ROI and get quickly moving to the next real estate project.
Temple View Capital, LLC (“Temple View”) understands the importance of partnering with investors who share the same market goals—and we’ll work with you to make sure your project gets started correctly. If you are ready to explore your next fix and flip opportunities, contact us today.