La Quinta, CA, real estate has become attractive for home flippers as it returns great profits. Luxury home flipping, however, is easier said than done. That said, when you know what to do, there will be fewer roadblocks along the way. You’ll be able to get the most out of your investment.
We’ve listed some of the top things to remember when taking on a luxury home flipping project.
Home flipping requires your commitment
Many people have taken interest in home flipping because of the potential high returns. If you want to give it a try, make sure you know what you’re getting into. Home flipping is not a passive investment and requires a lot of time and money. It also comes with risks that you need to manage closely. Make sure you’re ready to commit your finances and time to this project.
Having a mortgage pre-approval means two things. First, you know how much you can spend. Second, your chosen lender has deemed you capable of acquiring a hefty loan. Pre-approval, especially for high-end properties, can be time-consuming and intensive. Secure this first before shopping for a home to flip.
Work with a real estate agent that specializes in luxury homes
Exploring the local luxury real estate market is better if you work with an expert. Find a local realtor who specializes in your target areas.
For instance, if you’re looking for homes for sale in La Quinta, CA, it only makes sense to hire La Quinta realtors. They’ll know the ins and outs of the market as well as the variables of buying a luxury home, thus helping you find good deals.
Look for good deals
To get the most value off a flipped home, you must know what a good deal looks like. One good way to gauge a deal is by using the 70% rule where you only buy a home for 70% of its resale value minus the total repair cost.
For example, you found a house with a resale value of $500,000. You estimate that the rehab cost will be around $50,000. To come up with your offer price, do this equation: $500,000 x 70% – $50,000. Following this calculation, a good purchase price would be $300,000.
The 70% rule, however, doesn’t guarantee profits. You also need to consider other costs, including taxes, holding costs, and selling costs. Your realtor will help you look at the bigger picture.
In home flipping, you need to act fast to get the best deals under contract. And once you close the sale, you also need to renovate the property quickly. Remember: the longer you hold it, the more it costs you money.
We can help you with your home flipping project, including selling it fast and for a good price. Contact Kathleen O’Keefe Galigher, an experienced designer and Certified Luxury Home Marketing Specialist with 14 years of experience, for more real estate tips, including the best practices in home flipping and competitive pricing,
Call 760.567.7822 or send an email to okeefe(dotted)kathleen(at)gmail(dotted)com.