Flipping:
Estimating Costs
There is a
trick to flipping homes for profit. It comes in knowing how to
estimate the costs associated with doing the upgrades and repairs
that the home needs in order to sell for a good profit. The best way
to go about this is to move from room to room in the home making a
list of everything that needs repair as you go. When doing this,
make allowances for everything that it’s possible to do. It is
alright if this is different than what you are likely to do as
estimating high is a safe way to go.
Now it's time to price out your
materials. Head down to the local
hardware or home store and start
looking for the items you need to
bring your plans to fruition. One
thing to take into account at
this time is whether or not you
will be doing the work yourself.
If so then carry on. If you are
having a contractor do the work
then you may want to have them
shop for the parts you need as
many contractors have distributor
deals with local suppliers. This
can result in significant
discounts on supplies and parts.
Of course, doing the renovations
yourself can result in
significant savings but if you
are doubtful of your abilities to
do everything then a contractor
is a safe bet.
Another important part of
estimating the costs of a home
flip will be the money that is
necessary to pay for the home
itself. If you have had to take
out a loan on the home then you
need to be sure to figure several
months of mortgage costs into the
equation. One common mistake that
some home flippers make is doing
too much to the home. You must
remember that you should never
price the home out of the
neighborhood in which it is
located. If you renovate a home
in an area where homes go for
$150,000; then that should be a
guideline for your projected
asking price. A renovated home
that is worth $400,000 will be
hard to sell in a $150,000
neighborhood. Keep your home in
line with the rest of the
neighborhood for a better chance
of a quick sale.
For more helpful real estate
articles, check out these great
resources:
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