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This
is one point we can not stress enough. Research, do your
homework. Did you get good grades in school without doing your
homework? Not many do. The same applies to flipping that house.
Find
an area that is not already saturated with flippers, and focus
on the one area at a time. Research everything, this is a very
tedious task, but needs to be done on every property that you
even consider buying. Use other people to help you do your
research. A realtor that specializes in investment properties
will do a lot of the legwork realizing they are going to get a
commission when you sell it and maybe even when you buy it
depending on the situation. Estate attorneys are another source
of houses that often are in great shape but may need some
modernizing. When someone dies that owns a house, many
surviving family members just want to sell it as fast as
possible and if they sell it before a realtor gets involved
they avoid having to pay a sales commission. Attorneys that
handle foreclosures and bankruptcies is another source. If
people have an option of getting out of their house with a
little money in their pocket vs. getting kicked out and getting
nothing, some will take an offer on their property.
Research
the neighborhood, research recent home sales prices on
comparable properties in that neighborhood. Go there, talk to
neighbors. Stop at city or county hall and check out records
for the property. Look at how long houses in that neighborhood
sit on the market before they sell. Do they sell near asking
price.
Ask
yourself questions about every property. How did you find it?
Why hasn't someone else picked it up already? How much work are
you going to have to do? How fast can you complete the work?
Like with anything, always plan on the worst and hope for the
best. Think properties through, look at time and costs. Include
cost to buy, cost to rehab, cost to finance, cost to sell, and
time after all time is money. How long to rehab, how much work
you can do yourself, remember contractors are often on their
own time schedule, how long will it take to sell after the work
is done, how long til closing after accepting an offer.
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