Washington DC is a great place to flip property but the price point
is high for most new investors. DC has been undergoing major
revitalization and as a result you can find good deals in all four
quadrants (NW, NE, SW & SE) in DC. Flipping houses is a great
way to get your money to work for you. You may have seen shows like flip
this house or maybe you’ve been thinking about how flipping homes can
help you secure you and your families future.Washington D.C. is emerging
as the city of possibilities. Flipping houses in D.C. has turned out to
be a business of fortune for many investors.
The
Petworth neighborhood in DC is one of the hottest areas to flip right
now. The average deal price is about 350K and ARV is around $650K, so
with a spread of $300K and average rehab cost of about $120K you can see
why competition in Petworth is fierce. Here a some rehabs in Petworth
that closed in the last 90 days.A flipped home on the market in Petworth
that was bought in January for $250,000 and is listed at $597,500.There
is new statistical evidence that furthers the conclusion that the DC
area is a pretty good place to be if you’re flipping houses.
From
my Real Estate experience, flipping in DC have had major success in the
NW quadrant. Most say homes are a little more expensive but once rehab
is complete the re-sale value is amazing. I recommend Washington, DC to
anyone that can afford it.The best thing successful investors have done
is buy the property right. They've created their profit in buying the
property for the right price. The things unsuccessful investors have
done is buy wrong buy rushing and not really understanding how to buy
and going cheap on the rehab. They end up wasting money on holding cost
because people will not buy that house.
A
flipped home on the market in Petworth that was bought in January for
$250,000 is listed at $597,500 after completion of the renovation. There
is new statistical evidence that furthers the conclusion that the DC
area is a pretty good place to be if you’re flipping houses. According
to new data from RealtyTrac, DC is still the second-best metro area in
the country when it comes to flipping single-family houses. Average
gross profits on a flip in the second quarter of 2014 totaled $136,135
in DC.
Here’s a chart showing the other top cities’ metrics:
Flips
made up 10.2 percent of all sales in DC proper in the second quarter,
more than twice the national average for the quarter, according to
RealtyTrac. Gross profits nationwide were $46,000; in DC proper they
were much higher, at $222,106. (That’s in contrast to the lower
metro-wide figure cited earlier.) DC flips were bought for an average of
$296,395 and sold for an average of $518,501, according to the data.
However, there are several skills and people that every potential
flipper should have in place before even considering entering into a
real estate transaction of this nature. In this article we'll look at
the top five "must-haves" you'll need to succeed in this endeavor.
1. You need to hire a group of experts
While
a house flipper can certainly go it alone, it will certainly help to
retain individuals that are familiar with the legal, accounting and
construction ramifications of flipping houses.Flippers typically work
against the clock, so they must renovate a home on budget and then turn
it around and sell it before the financing costs eat up their profits.
In any case, a bevy of experts including a real estate agent, an
attorney, a contractor or renovator, an accountant, a home inspector and
an insurance agent can ensure that the work is completed in a timely
and efficient manner.
2. You will need a handyman or knack for Home Improvement
The
house flippers that make the most money buying and selling homes tend
to be handy people. That is, they have the ability to step in and lend a
helping hand when time or money constraints kick in. Most flippers
incorporate or renovate features like change a sink, install a
countertop, do basic electrical or plumbing work, brush a fresh coat of
paint, stain old-fashioned floors, add an outdoor wooden deck and/or a
firepit, build a pergola facing the garden, and/or shingle a roof. There
is no end to the list, it simply will depend on your budget and
preferences. Although it is not a good idea to renovate over the top and
raise the budget too high for buyers to afford.
The
obvious answer is that if you can do the work yourself, you won't have
to pay someone to come in and do it. However, there are other advantages
to being handy as well. For example, there are times when it will be
impossible to get an electrician to install an attic fan on short
notice. There are also times when a job must be completed without
warning at the last second in order to obtain a certificate of
occupancy. In these instances, having the ability to navigate your way
around a tool box is very valuable.
3. You will need a good lay of the Land
The
buyer should know about the area in which they are buying property. A
buyer should know, for example, what characteristics (acreage, number of
rooms, type of home, etc) are the most desirable in the area in which
they are looking to buy. Equally important is knowing what houses in the
general vicinity have sold for and if there is likely to be any future
development in the community (such as a new school, condominium or
shopping center) as this could affect supply and demand.
4. You will need a good Estimator
By
definition, house flippers attempt to buy a property and then resell it
at a profit in relatively short order. In order to do this, however,
the flipper must typically make some structural and/or cosmetic changes
to make the property more appealing to the next buyer.If the flipper
underestimates the costs associated with the refurbishment he or she may
be exposed to large monetary losses. Therefore, a flipper should be
familiar with construction materials (their use and their cost), as well
as local construction codes, the cost of local labor and the time it
should take to do a given job. It takes even the most seasoned
construction professional many years before he or she is aware of all
the nuances that exist. In any case, before becoming involved in
"flipping", be certain of your abilities to estimate a job in terms of
both cost and time.
5. You will have to be Patient
One of the biggest obstacles to making money in the real estate market is that buyers tend to overpay for a given property.
Typically,
buyers become emotionally attached to a property or develop some other
bond with it, which in turn forces them to enter into a contract on less
than favorable terms.However, savvy flippers have the ability to avoid
emotional purchases, and the desire to find diamonds in the rough and
properties on the cheap. They also understand that if they aren't buying
a property at a favorable price and with favorable terms, it makes
sense to simply move on to greener pastures. The fact is that patience
is a difficult virtue to teach and hone. In general, either you have it
or you'll lose a lot of money trying to learn it.
We
continue to see low housing inventory in the D.C. metropolitan area,
making homes that have been flipped more attractive to potential home
buyers. By purchasing a flipped home, they are able to get into a home
that feels new while still being in an established neighborhood.
There
are plenty of rundown homes in the city that could use the grit and
sweat of an energetic flipper. Redfin analysed the neighborhoods where
house flippers walked away with the biggest gains in 2013. Two
neighborhoods in Washington, D.C. - Petworth and Brookland were among
the top three, with average gains of $312,400 and $271,900,
respectively. The Beaumont neighborhood of Portland, Oregon, ranked
second, with an average gain of $285,600.
House-flipping is becoming an increasingly profitable business in
U.S., remarkably in Washington DC. However, many stumbling blocks may be
witnessed here-within, although it is possible to predict that a
cautious flip with proper utilization of the capital and resources
can lead to a remarkable WIN!
