Flipping: Estimating Costs
There is a trick to flipping homes for profit. It comes in knowing how to estimate the costs associated with doing the upgrades and repairs that the home needs to sell for a good profit. The best way to go about his is to move from room to room in the home making a list of everything that needs doing as you go. When doing this, make allowances for everything that its possible to do. It is alright if this is different than what you are likely to do as estimating high is a safe way to go.
Now it's time to price out your materials. Head down to the local hardware or home store and start looking for the items you need to bring your plans to fruition. One thing to take into account at this time is whether or not you will be doing the work yourself. If so then carry on. If you are having a contractor do the work then you may want to have them shop for the arts you need as many contractors have distributor deals with local suppliers. This can result in significant discounts on supplies and parts. Of course, doing the reno's yourself can result in significant savings but if you are doubtful of your abilities to do everything then a contractor is a safe bet.
Another important part of estimating the costs of a home flip will be the money that is necessary to pay for the home itself. If you have had to mortgage the home then be sure to figure several months of mortgage costs into the equation. One common mistake that some home flippers make is doing too much to the home. You must remember that you should never price the home out of the area it is in. If you renovate a home in an area where homes go for $150,000; then that should be a guideline for your projected asking price. A renovated home that is worth $400,000 will be hard pressed to sell in that kind of area. Keep your home in line with the rest of the neighborhood for a better chance of a quick sale.