The big real estate news across the country is that inventory is at the lowest point it’s been in years. That means fewer houses available for Utah buyers as well. With fewer houses to choose from and many buyers preferring a home they can move into without a DIY project, it could be a good time to invest in buying a home, fixing it up and selling it for a profit. Caution: there are important things you should know first and a realtor can guide you through the process!
When looking for a property to flip there are 4 major items to focus on:
1. Flips can be a financial train wreck if you do not have the means or the know-how.
- Flips are more than paint and flooring, that only adds saleability not value
2. You need to modernize a home using the square footage you have, open up walls, mew kitchens, add bathrooms and bedrooms if possible
- Have the cash to finance your remodel
- Cannot include the remodel in your 1st mortgage
- 20% down on Investment properties, unless it will be your primary residence
- FHA requires 90 days seasoning
3. Work with a Realtor that is experienced with flips.
- You need to protect your $$. The agent needs to have the knowledge on how to protect you from buying a money pit.
4. Knowledge of what to look for in an investment property and what hazards to be aware of
- Do not guess on what the investment will be, have drawings and bid done by a licensed Contractor.
Know where to spend your $$ to build the most value into the home
Know what the value of the home will be at completion, cost of flip, profit margin you will accept. The $$ is made in the purchase of the property not what you can sell it for. The Market value will be fairly solid before you start.
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