If you want to break into real estate investing and successfully flip houses you may have noticed how competitive the market is due to a shortage of housing. This results in high housing prices and intense competition. But don’t let that frighten you. The house float is still a profitable investment. Especially if you have the right strategy.
We’re here to help you make your money work for you. MY SMART COUSIN specializes in providing tailored solutions that will suit any aspect of owning investment property, from buying a house for the price of a car, something that is still entirely within the realm of the possible, to managing these properties once you own them. As an experienced Real Estate Investment Coach, we help you develop and implement a real estate investment strategy. We work with all clients and focus particularly on Black and Brown folks and women, providing advice that helps you build generational wealth.
Let’s dive into seven strategies that will help you succeed in today’s competitive real estate market.
#1 Understand the market landscape
It is important to fully understand the market in which you operate before your first flip. The local housing market is the starting point for most new investors. But with the current low housing inventory, other areas may need to be explored that has good trends
What to look for in the market:
- Trends: Is there growth in this sector? Are property prices appreciating?
- Demographics: Who are the potential buyers? First time home buyer? Resign from government service? Young professionals?
- Supply and demand: Are households becoming more demanding and less prepared? This usually indicates a hot market.
By identifying a more likely target market that matches the demographic you want to sell to. you’ll find profit opportunities that others may have missed.
#2 Finding hidden gems
The key to a successful turnaround in a highly competitive market is finding assets that are not immediately obvious to the average investor. The best deals are often found off the beaten path, where fewer buyers are looking.
How to Find Hidden Opportunities:
- Auction Houses Homes and houses sold at auction are often priced far below market value.
- Off-Market Deals: Work closely with a real estate agent or wholesaler who can connect you with listed homes.
- Networking: Enter the location where you want to purchase. Real estate investing is a relationship game. And the more people know about it, the better. The more you hear about a deal before it hits the market, the better.
These hidden gems will be the foundation for your transformation success. This is because it is possible to buy low and sell high even in a highly competitive market.
#3 Running the numbers
The 70% rule is important in finding promising assets to determine whether they will make a significant profit. This is where the 70% rule comes in. The 70% rule is a guideline that you shouldn’t pay more than 70% of the home’s after-repair value (ARV), minus the cost of renovations.
Example of the 70% rule:
If the ARV of the home is $300,000 and you estimate repair costs to be $50,000, you should aim to pay no more than $160,000 for the property ($300,000 x 70%) – $50,000 = $160,000. This ensures that you have a good profit margin to cover the costs.
#4 Move quickly in a highly competitive market
Speed is important in hot markets. When you find a great asset you can act quickly. This is because someone else may be keeping an eye on that asset as well.
Tips for moving faster:
- Get pre-approved for financing : Pre-arranging financing can help you reach a deal faster than your competitors.
- Build relationships with contractors: Having a trusted contractor on standby ensures you can quickly estimate repair costs. And start renovations while the property is still yours.
- Be prepared to make a decision: Hesitation in a fast-moving market can cost you the deal.
‘Trust your research and be prepared to make a quick offer when the right opportunity presents itself. By being prepared and decisive, you can snag a deal before anyone else has a chance.
#5 Choose improvements wisely to maximize ROI
Once you have secured a property wisely,the next step is to determine which improvements will provide the best return on investment. In flipping houses, every dollar you spend on renovations should increase your home’s value and attract potential buyers.
Value Added Innovations:
- Kitchens and Bathrooms: These are high traffic areas that buyers will carefully examine. Investing in modernizing these spaces often pays the biggest dividends.
- Curb Appeal: First impressions matter. Fresh colors, bright landscaping. and a beautiful front door can make all the difference.
- Energy-efficient upgrades: Energy-efficient window fixtures or even solar panels can make your home more attractive to buyers. and adjust the auction price further
It is important to control costs and focus on improvements that will provide the highest resale value.
#6 Pricing Strategy: Competitive yet profitable
When it comes time to list your property, everything is priced too high and the house can go on the market. Set it too low and you may miss out on profit opportunities.
Tips for a successful pricing strategy:
- Research Comparable Properties: Look at recently sold homes in the area that are similar in size, condition, and features to yours.
- Gain a competitive advantage by better understanding the price points buyers expect: Prices will be slightly lower than competitors to attract more buyers. However, make sure you factor in repair costs and expected profit margins.
- Take advantage of your renovation: If you invest in a high-value renovation, such as a revamped kitchen, or energy-saving upgrades make sure your listing highlights these features as justification for your proposed price. Strategic pricing helps you attract deals quickly and maximize your return on investment.
#7 Make your property unique
The most important thing in a crowded market is for your property to stand out from the competition. Buyers are looking at multiple homes. So you need to grab their attention as soon as they see your ad.
How to create a feature list:
- Professional photography: High quality photography is required. Consider hiring a professional to take beautiful photos of your newly renovated space to show off its best features.
- Virtual Tours: In Today’s Digital Age Many buyers want the convenience of being able to tour a home via phone or computer. Offering virtual tours can increase the appeal of your listing.
- Targeted Marketing: Use online real estate on social media as well as local advertising to target your ideal buyers. The wider your scope, the better. You will receive as many offers as possible.
With outstanding programs and strategic marketing you can be sure that your property will attract attention. And it could lead to a bidding war.
FINAL THOUGHTS
Flipping houses in a competitive market is challenging. But with a clever strategy you can overcome obstacles and still make huge profits.First time buying, renting or exploring other real estate investment opportunities we are ready to guide you every step of the way. Follow these seven strategies and you’ll be on your way to exponential success in any market!
YOU CAN ALSO READ: BUILDING A REAL ESTATE INVESTMENT PORTFOLIO: THE ULTIMATE BLUEPRINT FOR NEW INVESTORS
FOLLOW US: @MYSMARTCOUSIN