5 Important Factors to Consider Before You Start Flipping Houses

How can you make money in Fernandina Beach real estate market? There are many different strategies you can take to succeed in the area. You don’t need to buy the best house on the block. You don’t need to buy on the water. With a few smart approaches to home buying, you can make serious income and improve your future financial security.

If you are quick and smart, you can flip houses and make a small fortune. Below we look at the top five important factors you have to consider before you dive deep into home flipping.

View of kitchen that was flipped by homeowners

Control Your Bankroll

If you have $100,000 of money to use for your home, you don’t buy a home for $99,000. Managing your cash flow, and what we call your bankroll, is paramount. It is the life of your home flipping endeavors and you should never max it out. You want to stay flexible. Capping out your bankroll is anything but. If your home has damages, you need to repair something for a tenant, taxes are due, and anything in between, your bankroll is your life- and you have to manage it delicately and never max it out.

Establish Your Approach

What is your strategy anyway? You can flip homes with the intent of holding onto them for years down the line. You can buy for fast flips 30-day returns on the market. What is your overall approach? This will limit what you buy and who you work within the process.

Build Your Team

Speaking of who you work with, you need to build up your team. You can’t do everything. It is too much work and entirely wasteful. Furthermore, you aren’t an expert on everything. Find people who are skilled in a certain area. Realtors in Fernandina Beach can help funnel your potential leads on homes that fit your criteria. Repair professionals can come in and repair certain areas of the home (you could have a team of 20 repair professionals, all proficient in a dedicated area of home maintenance). Your team will be an invaluable source.

Find Your Skills

Find your skills and lean into them. Don’t buy a home that needs extensive repairs if you have no clue how to repair the home. While you can find a team member who can, you want to try to lean into what you know. Look at all the variables involved with flipping homes and look at the aspects that interest you and you are knowledgeable with. For example, some flippers only buy houses in total disarray in high-end neighborhoods. They know the repair costs. They know luxury. They know how to capitalize on these two things to make the most out of their flip. They stay in the neighborhoods they know to maximize their earnings and avoid costly mistakes.

Consider the Numbers

The numbers tell the whole story, and you need to factor them into every single deal. There are multitudes of ways you can apply for the numbers, but there is a nice formula you can use to start. You want to take the value of the home based on realtor estimates. This will incorporate comparable sales in the neighborhood, square footage, home additions, the tax rate, and more. The Fernandina Beach realtor can look at an average cost for what the home should cost on the market. You then take that cost and ad any potential repairs. This is where your professional team can come into play. Property assessors are also helpful here.

You take the expected cost and subtract any repairs. If the home should retail for $200,000, but if you expect repairs of about $50,000, you have $150,000. If the home is selling for $100,000, you have a potential profit window of $100,000.

Apply these rough numbers in every deal and look at what you can make on every flip. We love the idea of flipping houses- and so does America. With all the many home flipping television shows out there, it seems like every person and their brother is flipping homes left and right. But they aren’t. You can take advantage of home flipping in Fernandina Beach, and experience one of the strongest and most interesting markets in Florida.