3 Killer Fix and Flip Exit Strategies
Thanks
to the rise of house flipping shows, more and more Americans are looking into
house flipping than ever before!
Flipping
a house it a lot of hard work, but with a bit of luck, and a lot of planning
you can start making more money flipping houses than ever.
Having
a Fix and flip exit strategy in place for your flip is a necessity to make
money on your flip.
“Exit
Strategy means how you plan to get money out of your real estate investment.
Before you start flipping your home you should plan to get the most ROI for
your real estate investment. Having a Flip Strategy is key in order to make the
most for your property.”
-Loren Howard, Prime Plus Mortgages, Hard Money
Lender Arizona.
In order to
make the highest return on investment, house flippers need to first determine
their after repair value. With their ARV Exit Strategy 1 The Classic Fix and Flip
The
Classic fix and flip is what most people think house flipping is. A fix and flip means
purchasing that property, making repairs, and then selling or ‘flipping’ a home
for a profit.
We
found the following are always great for a boost of ROI on any property.
●
New Windows
●
Kitchen Rehab (small or large)
●
New Paint (Indoor and Outdoor)
●
New Roof
When
you do the classic flip, you need to make sure that you have a great property
that has a high selling potential.
While
picking the right repairs, and the right property to flip can be tricky, it is
a great way to make money quickly, and not have to worry about the long-term
maintenance of a property or tenants.
With
the classic fix and flip method, the reward is high but is risky. In order to
make the most of this strategy, you need to do your research, have the right tools, and make the right
repairs.
With
the classic fix and flip approach you also are looking at a one time sale,
while our other two strategies can make you more money with passive income!
If
the market is slow, or you are having a hard time moving your flip, leasing and
renting your property are a great way to start making money off your flip.
Exit Strategy 2 Leasing Your Flip
Leasing your flip is
a great way to slowly move your property to a buyer that isn’t ready to
purchase yet.
You can get clients
to agree to your asking price, without having to haggle with them or find new
buyers.
By Leasing your flip, you open up more ways to
move your flip and start making money on your flip as soon as possible. Not
only does it guarantee that you will be making a monthly income, but can keep
an interested buyer in your property, so when you do go to list they will be
the first to make an offer.
You draft an
agreement between you and the buyer where the buyer agrees to make a down
payment.
Most hard money lenders
will happily help you refinance the loan you have on your flip so you can make
more money with a leasing option for your flip
Exit Strategy 3 Renting Your Flip
When
renting your flip, you can make a steady passive income, and always sell your
flip when the market is right.
The
Market for rentals is higher than ever, and by upgrading your flip to have
sought after features you can ensure a high monthly income.
With
high student loan debt, fewer millennials are buying homes, and having an
affordable rental option is always in high demand.
Finding Good Tenants can be hard, but with due
diligence, and possibly a rental management company you can make more money,
with multiple tenants, and start working on building a system of high paying
rentals.
Rentals
are here to stay, so renting your flips, and to families, or roommates is a
great way to make money on your flip, or even wait for better market conditions
for selling your flip.
SUMMARY
Making
money by fixing and flipping properties has never been easier than it is now.
With more finance options and types of properties and investment strategies,
it’s easy to make money as long as you do your homework.
Depending
on your market, you may find that you can make money with your flip with any of
these exit strategies. Make sure you know your flips after repair value in
order to make the most of your property with one of these flip strategies.
- The Classic Fix and Flip: Buy, repair, and sell the property for a profit. By making sure you make the right repairs, pick the right property, and have your ROI calculated you can move property and a make a large one time profit.
- Leasing Your Flip: Depending on your market, leasing your property can work to start making monthly payments on your property before a one time sale to the new tenants. You can make sure to get the full value of a home, and that it is taken care of when you are ready to list.
- Renting Your Flip: For slower markets, and those looking to make a long time passive income renting your flip is a great way to make more money over time than a one time sale. You can even rent to multiple tenants to make the most for your flip.
What’s
Your Favorite Flip Exit Strategy?
BIO:
Catherine Way graduated from Michigan State University
with her Bachelor’s of Advertising with
a specialization in Graphic Design. She spends her free time finding new ways
to talk to people, through writing, designing, dancing, and more. You
can see her newest creations here.
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