Sunday, January 1, 2017

Phoenix Flipping Houses for Profit: How Do I Get to the Profit Part?

Phoenix Flipping Houses for Profit
Phoenix Flipping Houses for Profit
Most people do not attempt flipping a house just for fun. While it has the enjoyable aspects of being a fulfilling project, learning new skills, and providing the feeling of accomplishment, most want to end the project with a profit. The tricky part that house flippers run into is that there are a lot of steps that can keep it a struggle to stay above the bottom line.

A crucial element to Phoenix flipping houses for profit is staying educated. Despite any method or technique to flipping houses that is “guaranteed” to turn a profit, the best way to secure your investment, and reduce the risk of losing everything, is to go in after you have done your homework and found the proper mentors to help you.

After you have done your due diligence though, the first step is to understand the “after repair value” (ARV) of the home. As the name implies, this is the value of the house after you have put your blood, sweat, and tears into it. The main goal of flipping houses is to accurately project the ARV and then repair the home for as little as possible. Experts say that after you have completely bought and fixed up the home, you should never have put in more than 70% of the ARV.

Phoenix Flipping Houses for Profit
Phoenix Flipping Houses for Profit
This requires a meticulous forecasting and budgeting process. One of the challenging elements of tracking and projecting costs is including everything that will end up being a cost. A house flipper needs to consider the monthly bills that will need to be paid while renovating the home. There should be buffer space because even a professional contractor will make mistakes that could significantly cost them. Keeping a buffer between your budget expenses and 70% of the ARV will encourage you to cut costs as much as possible and only work to increase your profit.

In general, when Phoenix flipping houses for profit it is important to know your numbers before you begin. If you do not start with good habits and good budgets, it will become too easy to spend your profit before you make it.

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