Do you want to learn how to flip your first house? There are many things about the process you might not see on HGTV. We have put together some of our favorite tips for flipping homes in Chicago and across IL!
For a first-time flipper, the process can become overwhelming. What might seem so easy, you will soon discover actually requires a lot of work. That said, everyone starts somewhere! Flipping homes can be a great way to earn income for the right individuals. Do your homework and find out if it’s right for you!
How to Flip Your First House in Chicago
Buy At The Right Price
Don’t compromise on this. Set your price before looking at any properties. No matter what you find, do not purchase beyond your means ESPECIALLY on your first flip. Do your homework before purchasing any property. Talk to other investors and learn about properties in your area. What features are highly desired by area buyers? What features, neighborhoods and property types should you avoid?
Have Funding Immediately Available
No matter the market, you will always have competition when it comes to finding houses to flip. A seller will likely give priority to someone who can close immediately as opposed to someone who will require weeks or months for the funding to go through.
The majority of people interested in buying a house to flip will have the cash on hand to buy immediately. In order to remain competitive, don’t just get “pre-approved,” rather, have the money to buy available now.
What Is The Local Market Doing?
You can’t just assume that because you buy a run-down property and fix it up that a buyer will appear. You need to consider the current demand in the area. Research how long properties are staying on the market, how much they are actually selling for and what amenities are the most sought-after.
The best properties are ones found in active, up and coming neighborhoods. Here you will be able to find great deals, ultimately reselling to people desiring to live in the area.
Accurately Assume Costs
There is never a true way to do this. All we can advise is to plan ahead for the unexpected and give yourself some wiggle room financially. You will almost ALWAYS find yourself needing to make an unexpected repair or pay for a miscellaneous license, fee or permit. You should also know exactly how much owning the house is costing you.
The goal with any flip is to resell it as quickly as possible. The longer you hold it, the more you will have to pay for taxes, utilities, insurance, etc.
What will happen if you aren’t able to sell the property within your selected timeframe? Don’t let the deal turn into a bust. Plan ahead for an extended sale date.
Don’t Spend Too Much Over-Improving
Many first time flippers make improvements as if they were planning on living in the house themselves. Don’t make the rookie mistakes of paying for expensive finishes, window treatments or tiles. Think economical when it comes to improvements. Fix and repair only what is necessary and leave the big, cosmetic improvements up to the next buyer.
But Do Add A Couple of Low-Cost, High-Impact Features
Without breaking the bank, you should aim to add a few touches to make the house more appealing for a resale. Adding crown molding in the living room, fresh paint throughout the house or new fixtures such as drawer pulls and door handles can all change a room at a low cost.
Often times instead of replacing appliances to match, you can find new fronts to match other appliances in the kitchen! There are many ways to improve a home without spending a fortune!