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What to look for when purchasing indianapolis real estate to flip

What to Look For When Purchasing Indianapolis Real Estate to Flip

Even though the Indianapolis real estate and financial markets are in a pretty bad shape this is the prefect time to make some money by flipping homes which are now available dirt cheap. If you have the means to make an investment and can hold on to it for a few months to a year or two, you can easily make a killing by flipping a house. If you are considering such an investment option, here are some tips.

Factors to consider

House flipping has good profit potential if done correctly, so the first thing that you need to consider is the amount of money that you have. If you intend to go in for a mortgage it is best to talk to the lending institution before putting in the hard work.

The next thing to consider would be the property. Don’t go for a house where the profit margin is low because even if it is available cheap you may be taking a risk. You also need to understand and be prepared for all the costs involved in flipping a house. Making a careful analysis of the expenditure will stop you from purchasing a money pit that you may get stuck with

When looking for properties to flip explore all the possible avenues from foreclosures to short sales and others. You should rummage through the local classifieds as well as talk to the real estate agents in your area. It is not necessary that you buy the house in the same area that you live in, but if you do, you will be able to keep an eye on the property market in the area more easily. A good real estate agent can be very valuable in buying a house to flip and selling it eventually. If you have a good standing with your bank, you may even be able to purchase repos directly from them.

When buying a house to flip take a good look at the area and the type of people who live there. For instance, if a lot of houses have swings in their yards, you can be sure that it is an area meant for families and buying a very small house which is too congested to raise a family in such an area can mean that you will be stuck with the property for long.

The Red Flags

Do not go for properties that need a lot of repair because the cost of renovation may eat up any profits that you may make. Also, if the repair work takes a lot of time you will lose your profit potential in the mortgage payments that you will have to make. You should ideally go for a house that is structurally sound; even if it is ugly it can be restored with a simple paint job, some cleaning and carpet change. But you don’t want to buy a home in Indianapolis which needs foundation repair, has fire damage, and needs a new roof or a house that has major mold infestation or has significant health risks.

If you are new to Indianapolis real estate or to house flipping, it may be a good idea to enlist the help of a professional appraiser before buying the property. A house inspection will help you to uncover any hidden damages, make sure that you have a sales contract in place that explicitly states that you can get out if you are not happy with the results of the inspection.

Finally know your financial limits. Don’t opt for houses which will take six months or longer to renovate or twice the budget that you had planned. Try to get the help of people you know to carry out the repairs; anything that can get you a discount.

Home flipping can ensure significant rewards, so follow the above tips when buying a home to flip.

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