Fix and flip investing is one of the most profitable opportunities in the current housing market, but it’s not without its hurdles. Below are four of the most common challenges that house flipping professionals face and tips for overcoming them:
1. Finding a property at the right price.
Fix and flip investors are regularly limited by geography, competition, and price. The current market boasts a plethora of competition for ideal property investments, and limited capital can be an annoying hindrance to success. Fortunately, with the right investment partner, rehabbers can rise above the crowd with increased buying power and fast financing. Of course, it’s important to stick within your price range and wait for a property ideally suited to your investment goals, but having a strong financial partner, like ZINC Financial, can give you the necessary strength when patience finally pays off.
2. Finding reputable contractors.
Nothing can cut into your potential profits faster than a bad contractor. Projects that take too long and go over budget can quickly sap your available capital and push your schedule past the prime selling months. Take the time to carefully research any contractors that you hire and find people that you trust. Once you’ve established a trusted network of contractors, use them on all of your projects to ensure that quality remains high and that you always get the work that you pay for.
3. Finding capital to finance a property.
Fix and flip investors sometimes make the mistake of finding the property before securing adequate financing. This is absolutely the wrong order of things, especially in this competitive marketplace. Having strong real estate rehab financing in place is the best way to move quickly when investment properties come on the market. Plus, a solid financial partner can help investors identify investment opportunities they might not otherwise find on their own.
4. Selling properties at the right price.
In the end, your sale price will be the ultimate factor that determines your ROI. You can and should do everything you can to help ensure a strong ROI throughout the rehab process, but the price you sell at will be your measure of success. For the best sales price, look for investment properties in the winter and early spring months and try to sell in summer. The housing market is cyclical, and the biggest ROIs are invariably achieved in the summer months.