A Detailed Business Plan will have to be created.
A Team will be needed, consisting of different members. Here is just a few.
Lender
Realtor - ****Thats me (Byron Charles)****
Contractor
Title Company
Key Things to consider in flipping..
Courtesy of the #1 Real Estate Brokerage in Maryland 'AVERY HESS REALTORS'
1. Total cost to purchase + repairs =Estimated ARV (after repair value)
When you purchase that coal, you have to factor in the cost to turn it into a diamond.
2. Cost to carry the property (example HOA or Condo fees that needs to be payed monthly)
HOA and Conda fees are necessary payments that needs to be paid or else a lien could be place on the property before your even ready to sell.
3. Cost to Borrow money
Many different types of loans such as FHA, Conventional or ARM. Each loan has interest rates and stipulation that needs to be factored. Example
4. Cost to Sell the property
Example warranties, additions, renovation and advertisement. Updating kitchens, bathroom and appliances have a cost as well but those nice addition makes your property highly desired in the market.
5. Cost to fix up the property
Repair cost and labor need be factored in.
6. Profit margin
The final and most important after the (Cost-Sold value). If your business plan was done correctly, Green should be your margin not Red.
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