Do you sit at home watching HGTV or DIY and think I can do that? You see these first time real estate investors laying it all on the line and making big profits. As an experienced flipper I can tell you that choosing the right property and making sure you have a contractor that will stay on budget and can detect any defects before you sign on the dotted line is HUGE! A small mistake in a flip can make or break any profit you had hoped to walk away with. In Huntsville there are some great investment opportunities but the margins are smaller which means the risk is smaller as well but you really have to make sure you do all your research before purchasing.
Five things to make sure you know before you buy.
- Unless you are a general contractor spend the money on a good home inspection before you buy. Inspectors are not specialist in any one field but will give you a good overall look at the house and may detect some items you missed in your assessment.
- Hire a professional to do any and all plumbing, electrical, and structural work. This way if any of these items come up during the resale process you have someone to hold accountable and you have that warranty to transfer to the new buyer which is a huge selling feature. Buyers like to know that a licensed professional was involved with any specialty work done to the property. It is well worth this investment to transfer this liability to the professional in the field.
- Be prepared for surprises. You have gone through that budget with a fine tooth comb and are sure it will not go a penny over budget. Let me start by promising on your first few investment properties you will go over budget unless you take out a planned improvement to cover a surprise. So make sure you have a little wiggle room in the budget for unexpected costs and make sure you have included at least 4 months of carrying costs and realtor fees. These costs can add up and can take you from + to – real quick.
- Keep your personal taste out of it. I know you may love modern or country charm but make sure any investment property is kept generic. A home that is too personalized is hard to sell and limits your audience. So before you make those design and palate choices go out and visit several builder models. Builders do this for a living and know their market so take their lead and keep it clean and simple.
- Do not scrimp on curb appeal. It is easy to spend your entire budget on that dream kitchen but the curb appeal is what gets the traffic in the front door. If the home looks dated outside and the yard is in disrepair you are going to lose a large percentage of your potential buyers before they even make n the front door. Many buyers will start their new home search online and then drive around taking an exterior look at homes before contacting a realtor for a tour. You want to make sure your home looks as nice from the road as it does inside.
And remember this is supposed to be fun so relax and have a good time. I love working with investors in identifying potential properties and will work with you through the entire process.