When you begin your journey flipping homes, there are some things you need to know, and other things you will want to avoid. We’ve put together some tips on how to sell a fix and flip house fast in Chicago.
Flipping houses in Chicago can be a great way to make a living or even earn some extra money while doing it as a side hustle. However, there are just as many people losing money flipping houses as there are making good profits.
In today’s post we’ll take a look at a few key considerations to analyze and make sure your house flipping project ends up being profitable.
First You Must Understand Your Location and Market
They say a home’s value is based on location above all else. 60% of the home’s value comes from where it is located on the map. Home prices may vary drastically as you move from neighborhood to neighborhood.
A house that might be a great value in one part of town, may sell for considerably less just a few miles away. Make sure you have done your homework and have a good understanding of home prices in YOUR neighborhood.
You will also want to have a grasp on the demographics in the area. Who is buying? Families, seniors? What are they looking for, and what can they afford?
Don’t Over-Improve The Home
Finding the right balance here is critical to maintaining profitability. It can be very easy to get carried away with the renovation and find yourself sinking money into different improvements that you will never get a return on.
In order to find the right renovation balance, you need to know you market very well. This means taking the time to tour other homes for sale in the area and taking of their overall condition and sale price.
Do not sink money into a home adding excessive details and upgrades. If bathroom cabinets are old and ugly, replace it with a simple (and cost effective) pedestal sink.
Always keep in mind, that no matter how many upgrades you make, a home will not sell for $500k, when the neighboring homes are going for $150k.
Price Your Home Before Anything Else
Before you sign the papers to buy the home, have the number in your head of what you will sell it for. Be careful not to overinflate this number. You should be pricing low in order to get a buyer and sell the home fast.
Be realistic and stick to your numbers. Do not think that by making a $40k renovation to the basement, you will be able to add $40k to your asking price.
Review all your numbers before getting started, and keep in mind, repairs typically require more money than what you initially plan for, so give yourself some cushion.
Only Drop Once
When you initially price your home, give yourself enough room to drop the price once. Plan to make a significant drop of $5-$10k if the house isn’t receiving much attention at your original asking price.
You will only want to drop the price once. Dropping the price more often can make the house appear as if something is wrong with it, or that you are desperate to sell.
Before starting any real estate investment project, it is important to educate yourself and work with professionals you can trust.