While the pandemic inflicted unprecedented losses on many businesses, one sector that did not follow that trend was residential real estate. The market both nationwide and here in the New York area continues to be red hot — largely as city dwellers move to the suburbs and the surge in demand has put the existing inventory of suburban homes in short supply.
Although finding an investment property can be difficult right now, it’s also an opportunity to make big profits – multiple sources including Bloomberg, CNBC, and Forbes report profits on flips are at a record high. And it’s an especially good opportunity for those who have insider’s knowledge like contractors and realtors. I know first-hand – as an investor and contractor, I have renovated and flipped more than 180 properties in my career.
House flipping advantages: Contractors
- They save money on labor; there’s little need to hire others to complete the jobs
- They have full control of the project and can ensure timelines are met
- They can expect higher profit margins, as there are fewer vendors to hire and fewer middleman markups
- They have an opportunity to network with other contractors and vendors that can lead to new business ventures
House flipping advantages: Realtors
- They have an understanding of the local housing market and current market conditions
- They know where to find the right properties and the right buyers
- They are familiar with current home trends and styles, which can help them refurbish a property that has wide buyer appeal
- They have experience in effective home pricing
- They can ascertain which distressed properties might have the biggest potential
A brave new world…but one worth exploring!
Like any new initiative, a business plan provides the blueprint for your overall operation. After all, if you wanted to build a house, you wouldn’t walk over to an empty lot and just start nailing boards together. A good business plan not only helps you focus on the specific steps necessary for your project to succeed, but also how to achieve them.
— Mission statement: Why are you embarking on this venture?
— Market analysis: What is the economic environment surrounding your project?
— Timeframe: How long will your project take – from buying the property to selling it?
— Personnel: Are you building a team or taking on responsibilities yourself?
— Financial projections: What will my costs be? What are my anticipated profits?
— Financing: How do you plan to fund your project?
— Exit strategy and contingency plan: How might you need to get out of the investment? Do you have contingencies in place in case of unforeseen circumstances?
To assist you in your house flipping initiatives, you can find a variety of real estate investor networking groups and clubs, oftentimes free, where you can learn more about investing, make connections and get the support you need to aid you in making the right decisions throughout the process.
Rock East Funding: we’re investing in your success!
With the real estate industry on the rise, now’s the time to more fully capitalize on its lucrative potential – by investing, fixing, and flipping properties. Make Rock East Funding your go-to destination for financing each stage of your project. As one of the most experienced and respected hard moneylenders in the industry, we’ll navigate the process efficiently and effectively for one simple reason: because we’re committed to your success. For more information or to arrange for an appointment, call 516-775-8800, visit us at www.Rockeastfunding.com and follow us on social media: Instagram, LinkedIn and Facebook.
ABOUT THE AUTHOR: Patrick Vertucci is Director of Business Development at Rock East Funding and brings with his comprehensive experience in conventional and hard-money lending. Prior to that, Mr. Vertucci was a successful investor and licensed contractor, involved with many new constructions throughout the New York area. He can be contacted directly at Patrick@rockeastfunding.com or on his cell: 631-645-8031