You have just finished buying your foreclosure; now it is time to get it ready to sell as quickly as possible. Before you can sell your investment, you have to know what needs to be done, and you need a plan. Let’s take a look at some of the things you need to consider when thinking about how to flip a foreclosure.
With all types of foreclosure investing, it is imperative that you know and understand market value in the area you are investing time and money. Without knowing market value, you may end up out-flipping your investment. Basically, you end up putting too much money into your improvements and the market will not allow for a return on investment when you put the house up for sale.
Market value also helps you keep in mind your budget. If you have an idea about how much you will make on the house, you will be better able to estimate the longest time you can spend holding on to the house before you begin to lose money. Knowing this gives you a time frame for how long you can spend making modifications and get it on the market and sold.
You have just finished buying your foreclosure; now it is time to get it ready to sell as quickly as possible.
CC image courtesy of Pip R. Lagenta
Now that you know your market value and how long you have to finish your improvements, it’s time to make decisions. Which improvements can you make to get the most money back in the shortest amount of time? There is a fine balancing act between what you want to do and what you are able to do with your time and money.
Making decisions before you begin the work will save you time and money. The difficult part comes when you begin to make the changes and something unexpected happens. For instance, you try to upgrade the kitchen and find out the sink has been leaking into the crawl space below for the last two months. At this point, it is important to make quick decisions and speak with a certified contractor or inspector to see which way is best to handle the situation.
Finally, in keeping with the time and money standard, stay on top of your construction crews. Making sure that things are done on time and crews do not give you the run-around is important to flipping your foreclosure. Giving the contractor the ability and space to do what they need is important so you do not crowd them, but you should visit the site often to check on the progress of work.
If the remodeling job is not going how you like, don’t be afraid to speak up and say something. After all, the finished product is your obligation. Until you sell the house, your thoughts and concerns are still top priority. If you are getting pushed around or your plans are being ignored, it is okay to terminate your agreement with the contractor. Of course you should pay him for what he has done so far, but it is your right to hire someone else.
By knowing your market value, making decisions that will not price you out of your upgrades, and taking charge in the remodeling process, you will have a much easier time flipping your foreclosure. The more foreclosures you invest in and remodel, the easier and more comfortable these tasks will become. The flow will also be more natural and your instincts will improve over time.
Patricia McElroy is a freelance writer for a number of personal finance and investing websites. She is a noted publisher.