How to Flip Houses for Beginners – Everything you Need to Know

How to Flip Houses for Beginners – Everything you Need to Know

Flipping houses can make you money, and even be fun. It may not be as fun or easy as you see them on reality TV shows, but there is certainly money to be made if you can do it right.
If you’re new to flipping houses, check out this simple guide on how to flip houses and make money.

Find the Right Market

First, you must find the right market. It may be in the area you live or a different area. You want an area that not only has affordable homes but has a market of buyers who want to buy renovated homes.
Decide, is your market ‘high class,’ ‘average’ or somewhere in between? This will help guide you to the right area.

Determine your Budget

Next, figure out your budget. Are you making a down payment? Do you need a mortgage? Are you using your home’s equity?
Your budget determines what type of and size home you can buy. If you borrow money to buy the home, make sure you can afford the monthly payment until you sell the home. The mortgage becomes a part of your ‘carrying costs’ which are the costs you incur until you sell the home.

Create a Business Plan

Once you know your budget, create a business plan. What type of changes do you plan to make? Are you making structural changes or minor renovations? Do you prefer cosmetic changes or do you have a budget to completely redo a home?

Work with a licensed appraiser or real estate agent to determine not only the value of the home now, but after you make the changes. It only makes sense to flip a home if it will be worth more than what you invested in it so you walk away with a profit.

Create your Network

With your plan in place, you’ll need a network of professionals on your side. Contractors, mortgage lenders, and a real estate agent are three of the most important people in your network.
The contractors will write up the estimates and if it’s within your budget, do the work. The mortgage lender will provide the financing and the real estate agent will be your ‘right-hand man’ throughout the process.
The right real estate agent will help you visualize your plan, make it a reality, and help you achieve the profits you desire.

Invest in Real Estate

The final step, once you do all the legwork is to buy the home and get to work. Buying and selling a home within 6 months usually provides the highest profits because it minimizes your carrying costs and allows you to flip home fast.

If you’re thinking about flipping homes, let’s talk. I’ll help you understand the market, what areas are great for flipping homes, and show you how to get started. When you have the right team on your side, flipping homes can be a great side hustle and can help you increase your retirement portfolio.

4 Reasons People Are Buying Homes in 2021

 

According to many experts, the real estate market is expected to continue growing in 2021, and it’s largely driven by the lasting impact the pandemic is having on our lifestyles. As many of us spend extra time at home, we’re reevaluating what “home” means and what we may need in one going forward.

Here are 4 reasons people are reconsidering where they live and why they’re expecting to buy a home this year. 

1. Record-Low Mortgage Interest Rates

In 2020, the average interest rate for a 30-year fixed mortgage hit a record low 16 times, continuing to fall further below 3%. According to Freddie Mac, the average 30-year fixed interest rate today is 2.65%. Many wonder how low these rates will go and how long they’ll last. Len Keifer, Deputy Chief Economist for Freddie Mac, advises:

“If you’ve found a home that fits your needs at a price you can afford, it might be better to act now rather than wait for future rate declines that may never come and a future that likely holds very tight inventory.”

This sense of urgency is driving many to buy this year.

2. Working from Home

Remote work is a new normal for many businesses, and it’s lasting longer than most expected. Many in the workforce today are discovering they don’t need to live close to the office anymore and they can get more for their money by moving a little further outside of the city limits. David Mele, President at Homes.com, says: 

“The surge in the work-from-home population has rewritten the playbook for many homebuying and rental decisions, from when and where to relocate, to what people are looking for in their next residence.”

The reality is, for some people, working remotely in their current home is challenging, especially when there may be other options available.

3. More Outdoor Space

Another new priority for homeowners is having more usable outdoor space. Being at home is driving those in some areas to seek less densely populated neighborhoods so they have more room to stretch their legs. In addition, those living in apartments and townhomes are often looking for extra square footage, both inside and out.

According to the State of Home Spending report by HomeAdvisor, of the households surveyed, almost half reported spending 27% more on outdoor living over the past year. This is a trend that’s expected to grow in 2021 and beyond.

4. Avoiding Renovations

It’s recently come to light that many homeowners would also rather buy a new home than go through the process of fixing up the one they have. According to the 2020 Profile of Home Buyers and Sellers report from the National Association of Realtors (NAR), 44% of homebuyers purchased a new home to “avoid renovations or problems with the plumbing or electricity.”

Depending on what needs to be addressed, today’s high buyer demand may make it possible to skip some renovations before selling. Many of these homeowners have prioritized buying over renovating for convenience and potential cost savings.

Bottom Line

It’s clear that homeownership needs are changing. As a result, Americans are expected to move in record numbers this year. If you’re trying to decide if now is the right time to buy a home, let’s connect today to discuss your options.

 

Four Expert Views on the 2021 Housing Market

 

The housing market was a shining star in 2020, fueling the economic turnaround throughout the country. As we look forward to 2021, can we expect real estate to continue showing such promise? Here’s what four experts have to say about the year ahead.

Lawrence Yun, Chief Economist, National Association of Realtors (NAR)

“In 2021, I think rates will be similar or modestly higher, maybe 3%…So, mortgage rates will continue to be historically favorable.”

Danielle Hale, Chief Economist, realtor.com

“We expect sales to grow 7 percent and prices to rise another 5.7 percent on top of 2020’s already high levels.”

Robert Dietz, Senior Vice President and Chief Economist, National Association of Home Builders (NAHB)

“With home builder confidence near record highs, we expect continued gains for single-family construction, albeit at a lower growth rate than in 2019. Some slowing of new home sales growth will occur due to the fact that a growing share of sales has come from homes that have not started construction. Nonetheless, buyer traffic will remain strong given favorable demographics, a shifting geography of housing demand to lower-density markets and historically low interest rates.”

Mark Fleming, Chief Economist, First American

“Mortgage rates are expected to remain low for the foreseeable future and millennials will continue forming households, keeping demand robust, even if income growth moderates. Despite the best intentions of home builders to provide more housing supply, the big short in housing supply will continue into 2021 and likely keep house price appreciation flying high.”

Bottom Line

Whether you’re ready to buy or sell a home in 2021, if you’re planning to take advantage of the market this winter, let’s connect to talk about the opportunities available in our local market.

 

Why It Matters Whether Your Home Faces North, South, East, or West

Whether you’re in the market for a new house, evaluating a new home construction site, or simply curious about the siting of your current residence, it’s important to understand the significance of a structure’s orientation.

“Location, location, location!” may be a well-known real estate rallying cry, but “Orientation, orientation, orientation!” is important as well. Orientation refers to the position of a structure on its site, and it’s typically described by the compass direction that the front facade of the structure primarily faces—for example, a house with its main entrance facing north would be described as north-facing. A home’s orientation is a crucial consideration for both house hunters and prospective new home builders. The direction that your home faces affects the amount of sunlight it receives as well as energy efficiency, heating and cooling costs, home maintenance, energy flow, and more. One orientation is not necessarily better than another; in fact, each orientation offers a different set of benefits. But knowing the benefits and drawbacks can help homeowners make smarter choices.

Natural Light

Exposure to natural light has numerous health benefits, including boosting your immune system and contributing to healthy circadian rhythms that promote balanced sleep-wake cycles. Home buyers are often attracted to houses that receive plenty of natural light, which is why real estate agents like to tout a southern exposure: In the northern hemisphere, south-facing windows receive the greatest amount of sunlight because the sun shines from the south. It’s also important to note that, because the sun rises in the east and sets in the west, east-facing homes will receive the most morning sun.

Radiant Heat

A home’s orientation is important not only for sunlight, but also for warmth. For instance, the southern exposure of a home will collect most of the warmth from the sun, and this can be both a benefit and a detriment. Radiant heat from the sun can help reduce heating costs in the winter, especially in colder climates. But in the summer that heat can lead to increased cooling bills.

Keeping Cool

Homes that are oriented to the north typically receive most of their direct sunlight in the back of the building. As a result, a north-facing house may remain cooler in the summer than a south-facing one. In warmer climates, north-facing homes can have the benefit of reduced cooling costs when temperatures climb in summer.

adjusting air conditioning

Photo: istockphoto.com

Home Maintenance

One downside of direct sun exposure is the damage it can cause over time to siding, roofing, furniture, fabrics, and flooring. The south-facing side of your home will be most affected by sunlight, so you’d be wise to anticipate and budget for such home maintenance as repainting or re-siding. It’s also a good idea to protect the interior furnishings of south-facing rooms by installing window film or UV-blocking curtains or shades, or using UV-repelling sprays.

Winter Snow and Ice

If your main entrance faces north and you live in a region that gets ice and snow in the winter, your home could experience greater cold-weather challenges. Because of the lack of direct sun, the facade of a north-facing home is more likely to fall victim to ice dams and icicles, and driveways and slippery walkways can be especially treacherous. The front facade of a south-facing home receives more direct sunlight, so ice and snow will melt more readily than it will on the houses across the street.

Decor Choices

The amount of light your rooms receive may affect the color and fabric choices you make when you decorate. For instance, design pros might steer you away from red and orange hues in west-facing rooms, which get most of their sunlight from 2 p.m. on. Fans of bold or dark colors may want to confine them to south-facing rooms, which get enough light all day to stand up to intense tones. And bedrooms with an eastern orientation should probably be equipped with sturdy or sun-blocking window treatments so sleepers won’t be unnecessarily roused by the dawn’s early light!