Whenever we do a Success Path Education seminar, Christina and I spend a lot of time talking about the nuts and bolts of how to get started flipping houses. We talk a lot about the ins and outs of finding a great deal, and how to avoid some of the worst pitfalls that can face a new flipper. Whether you’re just getting into the industry or you’ve been flipping for years, though, you’re probably interested in ways to make more money on every flip you make, right?
Well, I’ve been thinking a lot lately about the strategies and techniques Christina and I use to increase our profit margins. Here are the best (and most surprising) ways we’ve found that consistently get us more money on our real estate deals.
Look for Stale Listings
As you probably already know (because I’ve definitely mentioned it a few times before), as house flippers, we make our money when we buy our flips. Rehabbing will bring them up to market value, but it usually won’t get you more than that. Finding a really good deal is absolutely essential to gaining bigger profit margins, but low-priced properties usually come with big rehab budgets.
So how can you find the best of both worlds—a house at a great low price that won’t break the bank with rehabs? Look for properties that have been listed for 60 days or more. The longer a house has been on the market, the more likely the seller is to negotiate on price and the more likely you are to get a great deal.
Only Spend Money Where It Counts
If you watch our show, you’ll notice that we don’t spend a lot of time redesigning or decorating bedrooms or hallways. That’s because those rooms are so personal that you know your buyer is going to change everything you put in anyway. Believe it or not, bedrooms don’t sell houses. The kitchen and bathrooms (especially the master bath) are the big selling points in any home, so put your budget dollars where they count.
Start Buying Materials Early
Now, some things you just can’t buy before you get into the house, but flipping houses is all about being speedy with your rehabs and getting your properties back on the market as soon as possible. So, if a motivated seller accepts your offer, go ahead and start shopping for the materials you know you’ll need before you close. That way you can get to work as soon as the papers are signed.
If you do this, make sure that you buy materials that you can use for other flips if the deal goes bad. After all, no deal is done until you leave the closing table with everything signed.
Plan to Pay Your Buyer’s Closing Costs
This one sounds counterintuitive, but it’s a really good idea and will actually help you make more profits on your flips. If you offer to pay your buyer’s closing costs upfront, they’re more likely to make you a better offer on the house because they don’t have to factor in more costs afterward. Paying closing costs sells houses faster and at better prices, so it’s almost always a win.
Whether you’re just figuring out how to get started flipping houses or you’ve been doing it for a while, you can definitely benefit from these strategies for better profit margins. And if you’re looking for more great tips and tricks, check out a Success Path Education seminar in your area.