Here are a few things to look out for when looking for investment properties.
The obvious way to be safe is to make sure you buy low all the time.
Here are a few points to consider to ensure the house is a good investment.
1) Extent of repairs
Wholesale houses mostly need repair.
You must determine the extent of repairs needed and estimate how much it will cost.
If they are just light repairs, then the deal is probably good.
Unexpected fixes can east up all your profits.
2) Budget
Can you stay within your budget?
On occasion, it may well be crucial to do an inspection even for a house that needs repairs to find out if you might want to do structural repairs such as plumbing, changing walls and so on.
3) Time frame
Can you complete repairs within a short time?
Will the changes increase the value of the property to make it more marketable?
Speed is necessary when flipping houses so costs remain low.
Your goal should be to spend little money, cash in quickly and move on to the next deal.
4) Hiring contractors Vs doing it yourself
Even though flipping houses involves wholesaling them to other rehab real estate investors, it may well be necessary to assess the type of rehab that needs to be done and if you can do it yourself if necessary, or hire a contractor to do it for you while keeping the carrying costs low.
5) Neighborhood
You need to avoid war zones or very low priced areas.
You must also avoid high end areas when flipping houses.
Staying within the medium price range will not only give you more deals, but your properties will be easier to sell.
Is the house comparable with other houses in the same neighborhood?
Is it too small or too big compared to the other houses?
These factors make it tough to sell and leave little profit for you.
Stay within medium range in the same neighborhood to sell faster.
6) Comparable sales
Do similar houses sell at a price that leave a profit for you?
Though you could think you are buying low, comparable sales in the neighborhood could prove you wrong.
It is safer to have conservative estimate of the fair market value when buying houses than make end up making a loss because houses in the same market have not been selling within your price range.
7) Demand for the property
Even in a depressed real estate market some neighborhoods are more marketable than others.
Is it within easy access to services like shopping, schools, recreational facilities, and others that make it more appealing to house buyers?
This will make it easy for you to sell the house fast.
Whether you plan to flip the house to another investor or do the repairs yourself, these are important factors to consider that will make your house sell faster and move on to the next deal.