As professional home flippers, we often have several houses that are in different stages of the selling process at a given time. The selling stage is the only one that will generate income, but expediting this process is essential. Throughout our years of industry experience, we’ve learned that keeping this momentum going is the key to earning a profit. But, there are a few key steps that we take to continue making high profit margin sales. Read on to learn how our Long Island home flipping company turns a substantial profit, even in the current economy.
1. Calculate the ARV Correctly
The after repair value (ARV) of the home should serve as a compass throughout the renovating and selling process. In short, the ARV represents the maximum potential value of the home. Most home flippers gauge this value based on comparable homes in the area. For a truly accurate number, though, we calculate it based on the square footage of the home, using the square footage of recently sold homes in the area as a gauge.
Ensuring that this number is accurate is critical for the rest of the home flipping process. Often, the ARV can inform the repair budget.
2. List the Property at the ARV
While earning well above the ARV is ideal, it’s simply not practical to charge fantastical rates. This is especially true on Long Island, where buyers are only willing to purchase homes they have researched extensively.
Doing so not only positions the home at a more reasonable price, but also proves legitimacy. Buyers who are familiar with the housing market will be immediately deterred from outlandishly priced homes.
3. Consult With a Local Real Estate Broker
At Atlantic Shores Home Buyers, we believe that the best operations delegate tasks tactfully. With an in-house team that can handle the buying, refinishing and selling process, we do not delegate to unqualified sources.
And, having a real estate broker who is familiar with the area is also critical. Understanding the value of other homes in the neighborhood propels gives us a significant advantage over competitors.
4. Adjust Prices Accordingly
Even after diligent ARV research, some homes simply won’t sell. While remaining optimistic about the outcome is nice, it generally does not work. But lowering the price might.
That’s why we respond to a lack of interest or buyer commitment with prompt, calculated decreases in price. Doing so will help you speed this process along. Several months without any activity could greatly increase overhead costs, like insurance, electricity, and more.
In the end, price flexibility will make this endeavor more profitable than maintaining a high price point.
5. Thoroughly Clean the Home
Presentation truly is everything. Cleaning the entire home gives our potential buyers an idealistic perception of the home. This is not, however, limited to the home’s interior. Simple upkeep around the property– like fence maintenance and lawn cutting– will also aid in making a positive first impression.
Dirty homes, on the other hand, will give quite a negative impression to potential buyers. This will portray the home as one that will be perpetually dirty. Cleaner homes also give buyers the impression that the move-in process will be an easy transition.
6. Staging the Home
As experienced home flippers, we understand that, at its core, selling homes shares many similarities with selling products. In this case, we mean that catering to the audience is of paramount importance. Staging the home allows flippers to demonstrate the range of decorative possibilities to buyers, before they have even moved in. It also serves to give the home a certain sense of comfort, which is quite important for buyers.
Often, staging techniques are geared toward making the house appear larger than it really is. This involves strategic furniture placement, deliberate lighting, and creating a certain atmosphere.
Over the years, we have found that taking this approach will not only sell homes faster. It will also give buyers a stronger sense of satisfaction with their new home.
7. Arrange for Open Houses
Not only will open houses give potential buyers the opportunity to view your home, but it will also attract interest from others in the area. Observing interest in others may even motivate potential buyers to make a decision quickly.
With a team of experienced real estate agents specializing in the Long Island area, we are proficient in advertising our home flipping projects.
8. Keep Improvements Consistent With Neighborhood
During the home flipping process, making renovations and improvements is a no-brainer, especially for homes with dated features and designs. But, as we have learned, deviating from the initial scope of the project is financially dangerous. After identifying the need for a home repair or upgrade, we always take care to find the most appropriate solution. Overspending on lavish appliances, tile, and more will only increase costs. In most cases, it would not increase our return.
So, we have found that basing repairs on the standard within the neighborhood is the best strategy.
Advice from Long Island Home Flippers
With a strategic, procedural approach, home flipping can be simple. At Atlantic Shores Home Buyers, we abide by these rules because they work. We consistently earn a high return from all of our projects, and you can too. Contact us if you would like a simple, guaranteed investment opportunity with high return.