In recent years, TV shows on networks like “HGTV” have encouraged many realtors and those interested in buying and selling homes to get into house flipping. While flipping houses can be lucrative and rewarding, it can also be hard work, requiring a lot of planning, scheduling, and financial commitment. Fortunately, there are a lot of resources to help beginner flippers find their footing in the business. This ultimate guide to flipping houses in Santa Fe will offer guidance on how to get started and tips to succeed.
What is house flipping?
Flipping houses is buying homes, renovating and upgrading them, and then selling them for a profit. Generally, you purchase the home at a low price because it is outdated or needs significant repairs. After the renovations and upgrades, the flipper can sell the house at a profit.
One of the biggest challenges of flipping is that the process needs quick completion to make the most money. This can be difficult when a home requires a lot of work, but it is possible when flippers buy with a plan and a roster of reliable contractors on standby. The most successful flippers tend to go for the oldest or most rundown homes in the most exclusive neighborhoods. After repairs and upgrades, these houses become homes everyone is clamoring to buy.
Benefits of house flipping
There are many reasons to get into flipping houses. Many realtors or entrepreneurs who start flipping do so because they want a second source of income. Often, they'll move into flipping full-time once they've gained experience and made the right connections. House flipping can be very profitable. According to Fortune, home flipping hit a 15-year high in 2021, with many first-time flippers entering the field and learning how to turn a profit.
House flipping can also increase neighborhood property value. Many homes purchased by flippers are in poor condition, and the surrounding community might even consider them eyesores. Upgrading and enhancing these houses for a brand-new owner can make the neighborhood even more desirable and boost the property value of all the homes around it.
How to find houses to flip
First, develop a solid understanding of your local community, including neighborhoods that are considered especially "hot" and those that are likely to attract eager buyers. After you know which areas you prefer to target with your flips, you'll be better prepared to move quickly when a home goes on the market.
Regularly check foreclosure sites and attend auctions around the city to find candidates for flipping. You can also make it a habit to drive around periodically and look for "For Sale" signs. Keep an eye out for homes in top neighborhoods that show signs of disrepair or distress. This could include boarded-up windows, overgrown grass, or other general indications of neglect. Things like peeling paint are common in Santa Fe's hot and arid climate. You can easily remedy these issues that can be quite an eyesore in otherwise beautifully maintained neighborhoods. If you see one of these homes, note the address and research it later. Can you contact an owner and purchase the property directly?
Envision the possibilities
As the flipper, it is your job to see what's possible with the homes you purchase. An eye for design will go a long way toward updating and flipping houses that make the most money. Opt for flips that require mainly cosmetic upgrades, such as fresh paint, flooring, and appliances, and always think of what the space could look like after renovation. Typically, you can make even the most unattractive homes beautiful with well-placed upgrades and a fresh coat of paint.
Establish a plan early on
The key to being a successful house flipper is to make a thorough plan for every project. This will help keep you on track and on task so that you don't miss any deadlines and have the best chance of making the most money.
- Set a budget. Budget for the upgrades and renovations you know the home will require and then multiply that twice to account for any hidden costs. Unexpected costs will arise during the project, and being prepared for them will help prevent the financial drain.
- Plan updates and renovations. Work with contractors to schedule all the needed repairs and renovations. Just as all property renovations require different amounts of money, all projects have their individual timeline. Be clear about your timeline with your contractors, and make sure that everyone is on the same page.
- Complete the redesign. After you have completed the flip, do a thorough walkthrough and test every appliance. Look at the property as a new buyer would, and imagine yourself living there. Are there things you would want to change? Consider what buyers might want. In Santa Fe, buyers will look for pools, upgraded heating, ventilation, air conditioning systems, and outdoor living spaces.
- Stage and market the home. Once satisfied with the renovations, it's time to stage and market the property. Work with a real estate photographer to show the home at its best. Working with an expert real estate agent is the best way to list the property since they can handle showings and help you field offers.
House flipping mistakes to avoid
While flipping can be very lucrative, some pitfalls exist, especially when starting out. The most common mistake is thinking that house flipping is easy. Rather, it can be a significant challenge. Don't let TV shows or pamphlets coming in the mail fool you into thinking you can pick up flipping overnight. Most people can become successful house flippers, but it requires a significant time and money.
Another mistake is not working with licensed Santa Fe contractors. You should always work with talented, reputable contractors, remodelers, licensed home inspectors, and real estate agents. Whether you plan to flip full-time or part-time, you will benefit from surrounding yourself with professionals.
Start your house-flipping journey today
Flipping houses is a fabulous way to make money and build strong community connections. For those who love the Santa Fe community, seeing neighborhoods grow and thrive is its own reward. If you want assistance flipping houses or buying and selling your property, contact the #1 realtors in Santa Fe with RCT Team today. As experienced Santa Fe realtors, they have the expertise you need to make any real estate venture successful.
