In this article we are going to assume that you have reached goals and saved up enough money to be able to pay a down payment and still have enough money left to fund your renovations.
Choosing the right house is always very important when you are looking for a property to flip. It is however especially important when you are looking to flip your first house. When you have flipped a few houses you will hopefully have built a cash reserve large enough that you can survive to take a loss on one. Taking a loss on your first flipp can be devastating because if that happens you will once again have to save up money before you try again.
Do what you can to chose a house that at the very least breaks even. Do not give up if you do make a loss. You are likely to have learned a lot of valuable lesson that will make the next one a success.
Make sure to chose a house that is within your budget for your flip. To not try to get to ambitious and chose a project that will stretch your budget to the max. To do so might result in a failure where you end up with no money and an unfinished house. It is better to chose a smaller project and have some extra cash for unexpected problems. There are always unexpected problems. Your goal for your first flip should be to make a profit. Not to make a large profit. Chose a project you feel confident you can completely within a reasonable amount of time.
Try to find a house that you can fix and sell again within a short amount of time. The longer you have to own the house the more expensive it will get as you have to pay heating, electricity, the mortgage and so on. I recommend that you chose a project you can finish in 3 months or less for your first project. Stay away from anything that will take longer than 6 months to fix. ‘
You goal should be to find a house that us ugly but that is basically solid. What this means is that you will be looking for a house with ugly colors, shag carpets, broken windows and dirty walls but that lacks expensive problems that needs to be fixed. A house that has a none leaking roof, no rot or other damage from moisture and no termite damage. It is also very important that you make sure that there is no cracks in the foundation and that the foundation hasn’t moved.
Basically you are looking for a house that looks like a wreck while in reality being a nice little house. It might sound hard to find a house like this but you will be surprised over how many of them there are on the market.
It is also good if it has an overgrown garden since this is another thing that makes most buyer avoid the property. A property like this will require very small investments to turn it into a house where people want to live. All it takes is a lot of hard work cleaning up the garden, cleaning and painting the house and replacing broken windows. It is often possible to raise the value of a house like this by 15 000 + without having to spend more than a couple of thousands.
Another benefit with properties like this is that you can get them on the market again very quickly if you work hard. It is often possible to fix them up in less than a month.
Property auctions can be a great place to find your next property. You can often get houses at a very good price. This is especially true if you invest in an area where there are few other flippers. Sometimes these auctions will contain houses that you have to bid on sight unseen. Buying on these properties might give you a great deal but you should never buy one of these houses for your fist flip. Your first flip should be a sure thing.
It can be very profitable to drive around looking for houses that looks like they might suit your need. Try to find out who owns them. Sometimes you can get a great deal this way from people who were not planning on selling their property but that decides to do so when they get an offer. This is especially effective if the house looks a lot worse then it is.
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