1. Know the Local Market
Understanding the local market will be your key to profitability. Knowing what properties are selling for, what types of homes are being built in the area, and the current list of available homes for sale is crucial to success. You can find all this information by visiting your city or town's website.
2. Timing is Everything
It may be a cliché, but it is true for this process. You will want to time the purchase of a property so that you have a decent amount of time to fix it up before listing it. This ensures you won't spend all your money on the acquisition and be left with little or no equity in the home after putting countless hours into renovations.
3. Do your Homework
Fixer-upper properties are usually selling at a discount, but that doesn't mean you should pay full price. If you have to, go in with multiple investors to purchase the home. One of the best places I've found for information on potential acquisitions is BiggerPockets' Fix & Flip Forum . You can search for potential deals and even contact sellers that way.
4. Be Realistic with Your Renovation Plans
Many first-time fixer-uppers take on projects they aren't equipped to handle. This leads to delays, extra costs, and sometimes even bigger problems down the road. Do your research and be realistic about what your home needs and your skillset. If you want to use real estate as a method of building wealth, consider Tax Lien Investing.
5. Be Patient
When you find the perfect property, it may take some time to get a deal done, especially if you are new to the process. I would recommend only looking at properties that need no more than $20,000 worth of work (not including repairs for issues such as termites, mold, foundation, etc.). In addition to saving you from spending more money than you should be, this will also give you the time to educate yourself about how the process works and whether or not fix & flipping is right for you.
6. Know what You're Selling
In order to have a successful flip it's important that your property is priced right for today's market. You can balance price and demand by using tools like Zillow's Home Value Estimator. This will help give you an idea of what your home is worth, keeping in mind market trends to make sure you are competitively priced.
Tax Lien investing can be key when it comes to finding deep discounts and utilizing the fix and flip strategy. Check out our workshop if you want to learn more: https://www.tlwbevents.com/workshop