How to Line Up Buyers for Your Fix and Flip
The goal of a fix and flip is to purchase a property and make needed repairs and renovations before reselling the property as quickly as possible. Any delays in the process will decrease the value of your investment due to holding costs such as loan interest, property taxes, and utility costs. The total amount you will need to pay increases with every passing day. Figuring out how to line up buyers for your fix and flip as quickly as possible, maximizes the overall value of the deal.
Lining up a buyer and completing the fix and flip as quickly as possible also reduces the risk of your investment. As long as the property is in your name, you are responsible for damages, theft, or any personal setbacks that further delays the project.
The best way to ensure your fix and flip is completed within a reasonable timeline offering you the highest return on your investment is to sell the property before renovation work is completed, or even better before the work has begun. It may seem implausible, but it is possible. The following are ways to help you line up buyers for your fix and flip project to maximize your profit.
Make the Sale as Early as Possible
While you cannot sell the property while work is still being performed, potential buyers may put down deposits with a contract to complete the sale at a specified price when the property repairs are finished. Getting in on the sale early gives the buyer the chance to have input on the renovation details.
This personal approach does have its risks, and it is recommended that you secure a more substantial deposit on the deal and set limits on the customization elements of the property’s rehabilitation. Make sure you get all agreed parameters of the agreement in writing as protection against the buyer, expanding the budget, or adding costly time to the schedule.
Network with Local Real Estate Agents
Real estate companies and agents have a lot of pull when it comes to finding and dealing with a wide range of prospective home buyers. They know the market, they understand the neighborhoods, and they have contacts that can help you find your buyer. Potential homebuyers generally will trust an agent more than they will trust you. Building good relationships with local real estate agents that can vouch for your character and business practices will help you find a reliable buyer.
Get to Know the Neighbors
Open houses in the area of your fix and flip project are opportunities to get to know the neighborhood while speaking with the hosting agent and house visitors. While letting them know of your available property, you can also learn valuable information about the local market status and trends, and what buyers in the area are typically looking for.
List Property as Early as Possible
The faster you can get your property listed, the quicker you can find a buyer, even if you have not begun work to renovate the house. Utilize the latest in real estate digital technology to create 3-D rendering of the exterior and some interior rooms to give prospective buyers the most complete and attractive images of the property.
The best way to get and keep the market interested in your projects is to successfully complete several flip and fixes to build up a solid reputation in the industry and the neighborhood. Get so good at it that buyers and agents will seek you out about our next project.
For complete information on the process of fix and flip projects, and to have all your real estate questions answered, contact Houston area industry experts at Tidal Loans today.