Complete guide to House Flipping: Everything you need to know
Buying a home at a good market price, remodelling it, and reselling it for a profit within a brief period is what House Flipping is all about. It’s an investment strategy, that is popular in Spain and is currently experiencing a boom. The numbers speak for themselves: real estate investment in our country generates returns that are twice as high as Treasury interest yields and more than the average dividend payments from companies on the Spanish stock market.
However, in real estate, not everything goes. Successful outcomes are only possible when a carefully planned strategy is in place that takes into account all the aspects that come into play in a changing market and we must have a thorough knowledge of all of them. In other words: when you can count on the advice of a real expert at each step. At Homes by Gestilar, we firmly believe in this property investment model. We are the first Spanish developer to set up a House flipping division, and with this guide, we equip you with everything you need so that you, too, can benefit from this unique formula. Let’s examine it together, step by step.
House Flipping Definition
House flipping is a real estate investment technique in which a home is purchased with the intention of remodelling and reselling it quickly in order to make a profit within a short period of time.
But, at Homes by Gestilar, we like to take this process one step further. Our method is to revamp properties to turn them into completely one-of-a-kind homes. This way, in addition to positioning ourselves ahead of the competition with a product that stands out in terms of quality, design and value proposition, we promote access to homes with new-build features and revitalise the city’s residential landscape. This makes this system a very convenient option if you are looking for a new residence rather than investing to resell the property. Because House flipping is an unbeatable method of real estate investment ,as well as a way to get closer to the city in which we want to live.
Why property investment is a great option
Investing in a market that offers a safe haven from inflation and generating high investment returns are reasons why real estate outperforms all other investment alternatives. In Spain, housing is the main source of savings for 80% of the population.
And, in this context, the practice of House Flipping is becoming most attractive option. The reason? It’s a business with very short cycles, it is a product that adapts to market fluctuations, there are a significant number of homes to refurbish in any location, assets with greater liquidity, and no unexpected cost surprises.
House Flipping Process
Another draw of this practise is its clarity and speed, involving the strategic acquisition of the property, its refurbishment, setting the market price and the quick sale of the property.
House Flipping Advice
Homes by Gestilar have been developers for over 15 years. We can reveal to you some of the best kept secrets about House Flipping based on our experience.
How to find the perfect property
Doing your prior research is essential. Check a wide range of sources and compare: auctions, online platforms and real estate agents. It is in your interest to get the property with the highest investment potential.
How to assess the potential of a property
But what are the factors that influence this potential? Pay attention to the condition of the property, the location, the property’s potential for renovation and the market value. These are the elements that make up the magic formula for determining whether you have found the ideal property for house flipping.
How to calculate the ROI (Return on Investment)
To calculate the potential return on investment, conduct a detailed analysis of the costs of acquisition, renovation and sale.
How to finance your investment
Mortgage loans, lines of credit or partnering with investors to secure the necessary funds are avenues that we consider are the most worth exploring.
The renovation process
The renovation is undoubtedly the cornerstone of House Flipping. This is the most decisive point in the process when the quality of the reform and the speed of its execution become the most critical factors. Make it possible step by step.
How to find a good sub-contractor
This is one of the most crucial steps in the process. It is worth taking the time to research and interview experienced residential renovation contractors who are able to offer a unique product. Check references and review previous projects to ensure that the contractors can be trusted.
How to draw up a realistic budget
in House Flipping approximately 80% of the expenses are attributed to the acquisition of the property. This is one of the factors that make it a reliable investment, as the budget can be easily estimated. To accurately determine the cost of renovating the property, evaluate the costs of the materials, labour, and any other details that are involved in the renovation process. A helpful tip when creating a budget is to set aside some funds for unexpected costs. This will ensure that your budget is more accurate and realistic.
How to manage the time frame and the renovation schedule
It is essential to be organised in the practice of House Flipping. Establish a detailed time line to monitor how the renovation is progressing. Meeting deadlines is crucial to minimise additional costs and get the return in the time period you need.
How to supervise the progress of the renovation
Keep in regular contact with the contractor and make frequent visits to the property to ensure that everything is progressing as planned.
How to sell the property
You’re almost there! You have bought a strategic property and have upgraded it to create a unique product. You simply need to know how to put a price on the quality of the product you are offering and communicate its value to close the sale sooner than you might imagine.
How to set a fair price
To find out the prices of similar properties in the area and to identify any good opportunities, we recommend that you work with a real estate expert. At Homes by Gestilar, we know how to offer a distinctive product at a competitive price in order to quickly attract buyers.
How to prepare the property for sale
For an effective and distinct house flipping project, it is important to go beyond basic cosmetic enhancements such as thorough cleaning and a fresh coat of paint. Ideally, the renovation should go further and deliver a high-quality outcome. A modernisation that results in much greater potential for the property and maximises its market value.
How to promote the property
The real estate investment strategy must always be accompanied by a marketing strategy. First off, it is highly recommended that you obtain professional photographs of the property for your online ad campaign and social media presence.
How to handle offers and negotiation
If you follow all these steps we guarantee that offers will soon be coming in. Put them on the table, assess them carefully and negotiate the terms and conditions that meet your initial objective. Do you still have some questions? Seek professional advice so that you can make an informed decision.
How to avoid common mistakes with House Flipping
Homes by Gestilar understands that in the House Flipping business, it is just as crucial to identify the strategy to follow as it is to know what mistakes to avoid. Be alert.
Do not underestimate the renovation costs
One of the most significant financial surprises is the renovation costs, particularly when there hasn’t been a thorough analysis conducted beforehand or when we haven’t set aside a contingency fund for unforeseen events. You now know that this will not be your case.
Do not be seduced by a property without doing your homework
House flipping sometimes works on a hunch. A bit of intuition is fine, but that doesn’t mean you don’t always need to do thorough research before investing. Don’t get carried away before making sure the numbers support your decision.
Don’t expect to sell your property in a saturated market
Hay áreas calientes con un exceso de oferta o con una demanda insuficiente que serán de todo menos estratégicas.There are hotspots of oversupply of properties or insufficient demand that will be anything but strategic. Look for interesting niches in the local property market.
How to House Flip successfully
On this path towards smart investing, don’t forget to add a good dose of soft skills to your House Flipping cocktail: flexibility, instinct, learning and analytical skills are some of the key ingredients for success.
Keep an open mind and be flexible
Don’t get bogged down in the details. Let your strategies adapt to fluctuating market conditions and new opportunities as they arise.
Be realistic about expectations and time frames
The speed of the house flipping process may surprise you, but please remember that it’s not a miracle. It requires time and effort, but with dedication, you can achieve great results. It is not instantaneous; you need to have a medium-term outlook.
Learn from your mistakes and adjust your strategy accordingly
Every House Flipping project is a great opportunity to learn and perfect your techniques. Assess your actions, identify areas for improvement and fine-tune your approach in future investments. You’ll be sure to master it in no time!
Seek advice and learn from the experts
Speak to real estate professionals, financial advisors and other investors with House Flipping experience. We will be delighted to help you at Homes by Gestilar.
Targeted research to detect buying opportunities, careful planning with a realistic budget and a detailed time line, a renovation that produces distinctive results and strong communication of what you offer to potential buyers compared to the competition. You’re almost there! You now know all the tricks for a successful incursion into the world of House Flipping.
At Homes by Gestilar we are the allies you need, we have the technology that takes House Flipping to the next level. Tell us what you are looking for and we will get it in record time. Together we will make your property investment a great success.