Are you thinking about flipping homes? You may wish to follow the unofficial rule of thumb: Investors should shell out 70 percent of the home’s ARV (after repair value), minus any required repairs. The ARV is the home’s worth after it’s been fixed up for sale. To provide an example, if a home’s ARV is $150,000, but it needs $25,000 worth of repairs, you’ll pay no more than $80,000 for it as you ‘re anticipating a profit on top of the repair costs.
Two other useful tips for house flippers:
Have a business plan in place. Flipping is far too expensive to be considered a hobby. Because of the money involved, most lenders will want the proof that you’re primed for success. Besides outlining your end goals, the business plan should also detail what you would do if things go south, how the project is being funded, and what strategies are in place in finding and flipping the home(s).
Recruit. Though you’re probably doing this for yourself, you’re going to need at least some help with certain aspects of the project. Maybe you’re more of a hands-on person versus a number cruncher. Hence, you’ll want to have someone with accounting experience. A real estate agent who can help you sell the home, a contractor if you’d rather not deal with the manual labor, these are all vital.
This update is by hard money loans Miami company Monroe Funding Corporation, a direct equity lender serving clients throughout Central and South Florida. We specialize in first mortgages on non-owner occupied residential and commercial property investments as well as real estate loan options. Our fast and flexible loan programs get you to the closing table quickly and professionally. For more information on Tampa hard money lending or St Lucie County hard money lending, please call 954-816-0388 or fill out our application.