Maybe you’ve seen a couple of reality TV programs showcasing the heart-pounding excitement of house flipping on a tight budget. You enter into a world where the flipper acquires the run-down property and goes through a thickening plot of financial misfortunes and uncovering hidden problems–all with the hopes of fixing and flipping the property before the first mortgage payment is due.
While this might be an “action-packed” scenario of house flipping, perfect for engaging your interest and keeping you glued well into the next episode, more often than not, this is not how it happens for most investors.
Investing in a fix & flip property takes planning and strategy. And many investors within this space understand that flipping a home before the first mortgage payment is due might be a goal to reach, but truthfully, not many are counting on reaching this lofty goal.
What Exactly Is a Fix & Flip?
Sometimes referred to as a rehab, residential transition, or a bridge loan, a fix & flip loan is obtained by an investor for the sole purpose of purchasing a property (usually with issues that need to be addressed or “fixed”), improving the property, then reselling it as quickly as possible.
Loans for fix & flip investors are often not backed by large banks. In fact, most banks look at this as a high-risk situation. But smaller banks and private lenders typically provide funding for flippers as long as collateral or credit is adequate.
At the end of the day, fix & flip loans also usually come along with higher interest and shorter terms. Search on the regulated bridging loan before you get the commercial property.
Creating Curb Appeal
Curb appeal is the crowning achievement of landscaping and property design. And much like a charismatic popular person who just has that “it” factor, curb appeal is the “it” factor in the rental property world.
Creating curb appeal is often looked upon as a science of sorts. This is because it takes an in-depth knowledge of style and design to bring all the working elements of the property together in order to make any random passer-by stop and check out the property.
Curb appeal makes you stop and look around. And when you can achieve this, you’ll be better able to sell your property quickly. As such, most flippers work on the exterior first (if possible) in order to generate interest faster.
A few quick elements to consider when creating curb appeal are as follows:
- Fresh greenery and florals
- New paint and trim
- Resurfaced pathways and driveways
- Outdoor lighting
- Front door aesthetics
- Symmetrical landscaping
- Add planters and trees
- Clean gutters and roof
Most flippers spruce up the exterior of a home in a time-efficient manner. But if you have plans to do room additions, build porches, or any extensive remodeling, fixing up the exterior may have to wait until the end of your flip.
Outdoor Elements to Consider
If you want to attract potential buyers, you have to offer them something that they can’t walk away from. And often by utilizing outdoor spaces and adding a few extras, you can achieve this goal.
Outdoor Fireplaces
If you really want to attract potential buyers, installing an outdoor fireplace is a major selling point. And since the onset of the COVID-9 pandemic, outdoor living has become a major priority that home buyers are consider
Pools
Nothing sells a home more than the allure of a serene swimming hole. And even if this is just a basic pool without any cosmetic enhancement, simply having a pool is an attractive feature for any home buyer browsing today’s market.
Hot Tubs
You might not be living the dirty life on the Jersey Shore, but you don’t have to have a camera crew following you around in order to enjoy a hot tub. And just like having a pool, having a hot tub is a major selling point, and offers a homeowner space to relax the day away while enjoying the privacy of the backyard.
Putting It All Together
When you secure a loan and finalize everything at closing, the clock starts ticking. As such, this is why you need to go into your flip with a sound plan for renovations.
Before you ever sign on the dotted line, ensure that you know exactly what you’re getting into, exactly what needs to be fixed, and that you have a vision already in place that you can immediately begin working on.
For these purposes, it’s best to have the up-front cash to fund any construction projects, fix any issues, and then add the finishing touches to make your flip sparkle and shine.
In Case You Missed It!
