Flip A House

It is important, in real estate, to earn a high ROI when you flip a house. ROI stands for Return of Investment and to get a high ROI you must rehab a house. Rehabbing means to basically repair old real estate and earn thousands of dollars reselling them. If you want to make sure to get a good amount of money out of rehabbing a house, you will need to do some research on how to rehab. The first thing you need to know is what rehabbing is and the process and requirements that go along with it.

Those who are already experienced with the process of flipping real estate have a few simple house flipping tips in which they usually tend to follow to make sure they maximize the cost they invest when rehabbing real estate. Getting properties in wholesale is the first step, then get a construction loan. After you have done that, get the construction done through the network of contracts. If they are unable to get a loan, the next best thing is using a major credit card. If using a credit card is the path taken, make sure to save on interest by transfering the balance to an interest free credit card for six months and a maximim of one year.

Understanding the basic workflow in contracting is key when you flip a house, it insures the work will be done on time and in an orderly mannor. It is required you do the repairs in a certain order to insure you do not spend on unnecessary costs. For example, if you get the drywall completed and have to tear it down because your electrician needs to rearrange some wires, you will waste a lot of time and money that could set you back. Here is the order in which you should always complete your rehab:
1. Demolition: Clearing and cleaning out walls, wood, old appliances, flooring, old cabinetry or other materials from the house that is un-needed and will not be used.
2. Framing: Putting up wall studs where future walls will be built.
3. Roof: Fixing holes, re-roofing, etc. Self explanatory.
4.Windows and Doors: Replacing old windows and doors where needed. Re-painting old doors, etc. Self explanatory.
5. Electric: Re-wiring, new outlets, new light fixtures, etc.
6. A/C: Running the duct work, setting up the A/C system, etc.
7. Plumbing: Re-piping, new toilets, new sinks, etc.
8. Drywall: Putting up the walls, covering up electrical and plumbing. Self explanatory.
9. Paint and Trim: Painting the drywall, putting trim around doors and windows, baseboards, etc. Self explanatory.
Keep in mind that not all real estate will need everything on this list so just skip whatever your not adding to the house and go to the next thing to do on the list.

It is important to get a plan drawn out by a state certified architect or engineer before starting work on a rehab. Contact a construction services center to  get a good estimate on how long it will take to get the project done. A Notice of Commencement should be filed if the costs of the construction exceed a certain amount. This varies by state so do research on the requirements in your state. Finding it necessary to hire a contractor will also vary by state. It is also required to have a Certificate of Occupancy when you flip a house that is not fit to live in.

The choice to hire laborers to work on the rehab is available but if chosen, work needs to be watched closely to insure it gets finished on time and the way you want it done. The owner of the real estate should also be aware of the payroll taxes for the state in which the property resides. Insurance and workers compensation should be researched and known to the homeowner as well. Areas of certain construction should be subcontracted to the licensed contractor approprate to the specific rehab project. The licenced contractor should do all the plumbing, electrical and mechanical work though. They can also handle any of the sewer, water, landscaping, zoning, storm water, gas, fire and building. The local construction services center can help you to know what the contractors have licenses for and what type of work they can do. The final inspection will determine the quality of the rehab when completed.

Something that a new investor should never skip is the full inspection of a property before purchase. Make sure to also take advise other professionals give on the property to insure important aspects are not overlooked. Figure out how much structural and cosmetic work is needed, if any and get an estimated cost for the project. If the floors are sagging, holes in the roof, leaks, water damage, rot damage, fire damage or a cracked foundation, that is a sure sign that the house will need a lot of structural and cosmetic work. It may be best to look at other properties if the property has one or all of those indicators because the cost to purchase that real estate may be low but it will be a large project that will cost a lot to rehab and it may not have a high enough return to be worth the risk.

After you find a good enough property to purchase the first thing you should do is research the neighborhood. It's a good idea to find materials to match with the neighborhood to make the real estate blend in with the others. This is most cost-effective and brings a sense of unification with the community it's stationed in.

After fully evaluating the property and surrounding neighborhood, the next step is to work with the interior and exterior cosmetics. The interior includes 3 major areas that need to be worked on, the kitchen, bathrooms and living room. The kitchen is the most expencive of the three due to appliance replacement costs, cabinetry and countertops. The second most expencive of the three is the bathrooms. Bathrooms are expencive to replace because of the sinks, tubs, toilets and plumbing work. Last, the least expencive is the living room because there really isn't much needed to fix up a living room, just replace flooring, fixtures and tend to the walls. You can decide, using your judgement, whether replacing things like light fixtures, knobs, wood paneling or switches is necessary. Make sure to make the property more appealing to potential buyers by keeping everything neat and clean before showing them the property.

After you have completed the interior, it is now time to move on to the exterior. The lawn, garden and pavement on and around the property should look good when you flip a house. These are the first things buyers will see when they arrive at the property and first impressions are key! Just like the interior, you will need to use your own judgement whether things such as plants, exterior lights, mailboxes, doorbells, front door, screen door and house numbers should be replaced. Go out across the street and view the house from far away to get a better view to help with your judgement, there may be other things you can see from far away that you can't up close and vise versa. You can give a house a fresher look with a new coat or two of paint as well.

Depending on the kind of fixes that need to be done will let you know how much time and money will need to be put into the project. When you follow the order in which everything should be completed in you should be able to get the rehab finished in 20 to 30 days. It may take longer when working with multiple changes. Costs will depend on the type of changes that are going to be done and how many of these changes are needed. Keep in mind that if it is difficult to get an estimated guess on the cost of a project because of the type of work that will be needed to rehab the real estate, it is best that you keep looking for other properties to give you a chance to find a better project that will have a higher return and less risk.