Making money with a “fix and flip” property is a great way to build equity in real estate. However, it isn’t just about making cosmetic changes and putting a new price tag out front – It’s all about how you do the numbers.
People often buy and sell a fixer-upper without a definite plan. They buy a house, fix it up, then add $10,000 or $20,000 onto their costs. They then put the house up for sale at this price.
Have you ever bought a house according to what the owner has into it? Of course not. You look at similar houses to determine the value.
The Fix And Flip Formula
1. Determine the after-repair value of the house you’re looking at. NextStep provides After Repair Values (ARVs) that are based upon the metrics of the neighborhood, not upon an arbitrary repair investment.
2. Calculate costs: closing fees, loan fees, document prep, homeowner’s insurance, title policy, repair costs, interest on loans, property taxes, sales commission, fees, title policy, etc. NextStep provides accurate estimates for all costs associated with buying, improving, carrying and selling real estate.
3. Determine a profit that makes it worth the effort. Because NextStep deals exclusively in wholesale packages, you can be assured that the maximum amount of value is built in to every deal we offer.
Click Here to see before and after photos of some of our projects.