Real Estate Investing Is Easy
What will it cost to fix this place?
Or is it?
Do you know the numbers you need to know?
6 Numbers You Must Know To Make a Profit Flipping
- After-Repairs Value: the market value of the home after all repairs have been completed.
- Costs to Repair: the sum of all costs you will incur to bring the home up to salable condition. All of them, not just the big ones.
- Profit: the amount of money you will have when you subtract all costs from the selling price.
- Buying costs: the cost of the home, plus all closing costs and fees.
- Holding costs: what is costs to keep the house every month (or week), including the mortgage, insurance, utilities, water, trash pick-up, etc.
- Selling costs: what it costs you to sell, including the real estate commission, title insurance, title company fees, etc.
If you take the time to write out these numbers for houses at different price points and conditions (for example: poor – needs major work, moderate – some big items, mostly cosmetic, good – just paint and carpet), you’ll have a much better idea of which houses are going to be profitable.
Other Real Estate Investing Things to Think About
Houses in different neighborhoods might require different fit and finish to be competitive when you go to sell.
- Meaning, you might get away with laminate counters in one, but need to put in granite in another.
- If you are planning to make a living doing this, you need a good real estate agent on your team.
- If you decide to get your license to sell real estate, remember that you’ll be taking on a lot of extra work for marketing the property in order to avoid paying a commission to a Listing Agent.
- You’ll still need to pay a commission to a Buyers Agent. Many times what you save isn’t worth the extra time you’ll spend – time that could be used to find more properties to flip!
About Alison
