A fix-and-flip property refers to one that someone purchases to resell at a higher price, usually after they make some repairs and other modifications to the property. Property flipping can be a good source of income, allowing investors to make money relatively quickly. However, consider these three things before buying a property to flip.

1. The Neighborhood Where the Home Is Located

Sometimes, investors will peruse run-down parts of town that may have houses for sale at a relatively inexpensive price. This enables them to fix up a piece of property and make more of a profit than they might have on a house that was in relatively good shape, to begin with.

However, investors should keep in mind that although they have control over repairs and modifications to the property they purchase, they are generally not able to do much to change the neighborhood. For example, if the house they purchase is located in a part of town that has a high crime rate, they may have difficulty reselling the house for the price they want, or even reselling it at all.

2. What the Home Needs for Repairs

People who flip properties know that making repairs comes with the territory. That being said, they must still be mindful of their budgets and what a house needs in terms of repairs before making an offer on the home. Some of the most expensive repairs to make to a property include fixing the foundation or roof, mitigating water damage, installing a new plumbing system, and replacing the water heater. Investors working with a limited amount of funds may want to avoid purchasing properties with those issues.

3. Potential Buyers

Investors need to know who their market is when it comes to things such as determining what price points to resell their homes at and where to advertise that there are homes for sale. For example, say an investor purchases properties to flip in a working-class area where most people are looking to purchase starter homes. In that case, the investor will want to adjust the number of modifications they make to their properties to resell them at a lower price point while still making a profit.

Smart investors learn as much about their industry as they can before shelling out cash. Consider these three things before buying a residential or commercial property to flip.

Seek Expert Assistance

For entrepreneurs who earn a living through property flipping, Fusion Alternative Funding offers financing solutions for fix and flip projects. We offer both loans and lines of credit to suit your needs. If you’re interested in learning more about what we can offer you for your next fix and flip project, simply contact a member of our team to schedule a meeting. We’ll provide free business analysis to help us understand your needs and recommend either a loan or a line of credit.