Many people think that investing in a real estate property in Burbank is limited to buying real estate and then keeping it long enough until it gives a profitable return later on. Real estate experts often go beyond this notion of investment and flip a property to gain remarkable profits in a short time. Flipping is a term used to define the act of buying a home and then reselling them at a profitable price after a while.
If you have been thinking of flipping a property too, remember that it is not easy as it sounds. Read our brief 5-step guide to learn about how to flip a real estate property in Burbank for a profit.
Step 1: Educate Yourself
This is an integral step for anyone who has never flipped a home before. Educating yourself and learning about the real estate market trends, patterns, and legalities are essential before doing anything else. Aspects that you must cover during your research are:
- Learn Your Market– Think about the choices of home buyers and what interests them. Then compare these findings with what is available on the market. Are there options that fulfill the buyers’ needs? Are their gaps that can potentially be filled?
- Understand Your Financials– You will have to weigh your financial options after understanding how the residential real estate financials work. This will help you choose the right payment method. For instance, if you don’t have enough cash, you need to start looking up for reasonable mortgage options.
- Calculate the Average Cost of Flipping Projects – Talk to someone with experience of flipping a property and then estimate the average monetary investment required to rebrand a property. From minor cost-incurring tasks such as repainting the house to major ones like rewiring and re-plumbing it, calculate how much it generally takes to renovate a home.
Step 2: Act Smart
Once you have educated yourself about the technicalities of real estate, the next step is to start taking smart actions. Not sure what we mean? Here are some key skills to learn:
- The 70% Rule– Before you initiate the flipping process, you much analyze the amount of money you are willing to spend and how much you can afford to lose. The ideal way of deciding is to use the 70% rule according to which you should purchase a property of no more than 70% of the cost that mounts up after repair or renovation. For example, if the value of a home after basic replacements and repairs will be $100,000, you should not pay anything more than $70,000 for it.
- Negotiation Skills– Learn to negotiate at every level. Your profits during the flip will be more when you invest less but make smart choices. Utilizing good negotiation strategies when dealing with contractors, agents, etc. will help in minimizing costs.
- Networking with Potential Buyers– This skill is needed to ensure that you are in the loop with potential buyers and that you understand what they are looking for. This also helps in selling the property faster. Start developing your network from the moment when you first buy a real estate property in Burbank to flip.
Step 3: Hire a Realtor
By this stage, you will be in a good position to go ahead with buying a property, renovating it, and selling it again. To make this, otherwise overwhelming and tiring process easier, we recommend that you get a mentor or hire a trusted real estate agent in Los Angeles CA, such as Pezzini Luxury Homes. A reliable real estate agent will:
- Help you research foreclosures and listings
- Find the perfect affordable property to flip and carry out all the legal procedures
- Suggest what aspects of the property need to be altered in the light of homebuyers’ demands
Step 4: Make an Offer & Contact Good Contractors
When you set your eyes on a real estate property in Burbank, you shouldn’t wait too long before making an offer. If the home is too good for its value, your offer will likely have competition. So engage your realtor and make an offer that is tempting but also doesn’t restrict you from making profits.
Once you purchase the home, start looking for contractors who are known for high-quality and fast-paced work. You may start off by making minor renovations or changes yourself. But having contractors on board will help you fix the larger aspects of the home.
Step 5: Relist and Sell
The final step of the process of flipping a real estate property in Burbank for a profit is to relist it after the necessary changes have been made. If you do hire a realtor like Luis Pezzini, this is the stage where the agent will be most helpful for you. From linking you with prospective buyers to set up the best price, an experienced realtor can assist you in getting the best price and profit quickly!