The term “Flipping” usually consists of buying some of the run-down properties in San Diego with below market price, doing some repairs which will increase the property value and re-selling it as fast as possible for a good profit. So, let’s not try to mix “flipping” with development investing in which buyers purchase a property in development stage and re-sale it when is ready for occupancy.
Some tips on how to flip property in San Diego
If you are a first time buyer who would like to become an investor, the first thing to do is to familiarize yourself with the process of buying a property. Ones you learn that step – procedure will become just a routine for you. Consulting with a realtor is always beneficial – regardless if this is your first home or you already have a personal real estate portfolio. Property flipping in San Diego can become one of your best lifetime investments if done the right way.
There are many steps in the home purchasing procedure: market evaluation, home inspection, placing an offer, getting approved for a mortgage, fixing and reselling.
Market evaluation is just a first step in this process. Review statistics on property value in San Diego, like the price of same size homes in the area. Check how many properties went to foreclosure and determine current market trends.
Hiring a home inspector would benefit you in the long run. Inspection cost barely a few hundred dollars, but this step can create thousands of dollars worth of profit and save you from the headache. Since experienced inspectors know how to go into detail and even tell you how much it would cost to fix certain things. This is a necessary step especially if you are a first time buyer!
Since you have completed your homework correctly and crunched the numbers, it is time to start negotiation process. Do not give your best offer right at the beginning of the negotiation process! Tactical negotiation is a very important step. Meet the seller! Learn what his straights and weaknesses are. Get closer with him by finding the things that you guys have in common and talk about them. Place your first offer less than what you are really willing to pay for the property. By doing so, you give yourself room to negotiate. When you arrive at the price you are willing to pay, you and leave the seller with impression that he won the battle.
When looking to purchase a property you would like to flip, the best resource you can have is cash, but the average buyer lacks cash resources. Before you even get involved in buying the procedure, find out what mortgage amount you qualify for. Get familiar with terminology and carefully review loan offers, since lenders know how to be tricky. If you are low on cash, make sure to get qualified for a mortgage slightly higher than the property value set, since you will need to invest some money in fix-up process.
Ones you have a “key in hand”, it is time for repair. Get the most important fixing done first, especially if you are low on cash. Details and cosmetics can be done as budget permits.
Finally, place your property back on the market. Hire a good agency and have them work in your best interest.