How To Determine The Value Of A Property When Flipping Real Estate

The key to succeeding at flipping real estate is to purchase properties for the right price so that there is room to make a decent profit

. You will not be able to do this is you don't have a good understanding of the property values in your area. Here are some tips to assist you in determining the value of the properties you are thinking about buying.

You won't find any hard and fast rules about real estate values because the value of any property depends on it location. Properties in some parts of the country may be worth twice as much as similar properties in other areas. There are no shortcuts to learning about the property values in your area, but there are some general guidelines.

Obviously, the price of properties located in a neighborhood with a high crime rate, crumbling buildings or unsightly old cars lying around in people's yards will be lower than those in nice, manicured neighborhoods that give people a feeling of safety and security. Property values are also affected by things like the school district and the number of bathrooms in the home.

As someone who is new to flipping real estate, you should consider working with a real estate agent. The reason is that an experienced agent will already have a pretty good idea of the property values and can help you shorten your learning curve. The agent can also get you information on comps, that is, properties that have been sold which are similar to the one you are considering purchasing. Looking at comps is a good way to come up with an estimate of the value of a house.

Since you will mostly be dealing with houses that are in need of repairs, you absolutely must have a way to accurately estimate the cost of fixing the place up. If you make a mistake in this area, it can be the difference between making a nice profit or losing your shirt. What happens if you planned on making $25,000 on a deal but didn't realize it needed foundation repairs that will cost $30,000? Until you get the hang of things, always get an estimate from an experienced contractor before you buy the house.

When you buy a house with the intention of flipping it to another real estate investor instead of fixing and selling it to a homeowner, you must allow extra room for profit. Think about it, the person you are selling it to wants to make a profit too, so you have to buy the property cheaply enough to satisfy both of you.

If you pay too much for a house, you may find that it is impossible to get someone to pay the price you would need in order to make the profit you want, or even to break even. The offer you make determines the amount of profit you make. Always err on the side of offering too little for a house rather than too much. After all, there will be other deals.

by: J.P. Turner

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