Some of the flipping tips have been mentioned below:
#1 Building the right flipping team
Review your tools and resources with your mentor. Be as open and honest as you can. Discuss the members of your team such as: appraisers, contractors, carpenter, plumbers, etc. and note what else will be needed to round out your resources. Interviewing other individuals that are team players- such as your real estate agent and loan broker might end up being fantastic candidates to add to your team. Check in with your mentor about these possible players.
Get on board with your mentor and ask about how to acquire retail buyers and how to build a reliable database of investors.
#2 Assessing the right property
Assessing the right property by locating, analyzing and negotiating. This is so very important to whether you create a deal or not. It you are not comfortable with your methods, increasing your knowledge can be enhanced by having a mentor. Whether you gain profit or lose money in flipping- this is dependent upon how well you assess the property before obligating yourself to the seller. A mentor can also help you to verify the accuracy of the information provided by the motivated seller before you call it a deal.
#3. Buying and fixing the property
What is the best way to structure this deal?
Which contract should I use?
How much will I need to place into escrow?
Should I buy the property with my own cash, with a partner or through financing?
How will I pay for the repairs? How much should I calculate for holding costs?
What about permits?
The above questions are very stressful for the inexperienced flipper and may even discourage certain new investors from going forward. A mentor’s guidance can make all the difference in this arena.
#4. The right flipping strategy
There are variations in flipping – such as wholesaling and the buy-fix-sell method -sometimes it’s difficult to decide which way to go and why. Exit strategy is imperative. Should you wholesale/ assign the contract and allow another investor to close the deal? Should you position yourself as the end buyer, the wholesaler, or should you let a real estate investor close the deal for you in exchange for a fee? Would it be an even more feasible option for you to close on it yourself, fix it and then retail it to an end buyer?
Your mentor can help you to choose the best option for your situation because you’ve had that honest conversation about your resources and current needs.
Certain issues can be avoided if the proper agreements are executed prior to any exchange of goods, services or money. Do you have an assignment of contract? If you need one grab it from the fec knowledge section. A mentor can guide you in choosing and preparing suitable contracts for each specific deal. It’s also a benefit to determine which reasonable and otherwise unreasonable terms and clauses are relevant for you in your agreements.
As the real estate market changes, marketing that might have worked wonders before may not be viable at the moment. Ask your mentor what marketing strategy and plan should be implemented.
It’s possible and proven that by working with a mentor, your skills can be greatly enhanced and get you well on your way to your first deal. Have your mentor help you to choose a successful real estate investment and show you why and how they made that choice.
The training and the supportive relationship that you receive from a mentor will build your confidence as you proceed by yourself to your next flipping project.