If you've ever researched ways to make extra cash, supplement your income, pay down debt, or boost savings, chances are real estate investing popped up multiple times. Whether you buy properties, fix them up, and resale or rent them out, the additional money can be instrumental in helping to fund your lifestyle and accomplish long-term goals. Of course, flipping properties isn't an overnight or simple task.
There are multiple stages to real estate investing. There's a lot to complete, from identifying good properties and negotiating a price to making the necessary repairs and finding the ideal buyers or renters. Even if you have a generic understanding of these concepts and are handy with tools, chances are you're going to need some assistance getting it all done. That's why many real estate investors build a network of professionals like these listed below:
Property Inspectors
Once you have the keys in your hand, the first thing you want to do is have the property inspected. Home inspectors evaluate every inch of the home to determine its condition and any need for repairs or upgrades. They will provide you with a list of requirements and recommendations according to building codes and regulations in the property's locality.
General Contractors
When having a property remodeled, you need someone on-site to oversee the project to ensure everything is done appropriately. A general contractor is responsible for these types of tasks. They have a crew of construction workers and access to architects, suppliers, and interior designers to bring your vision to life. Their knowledge and experience ensure that the remodel goes according to plan, remains within the budget, and is completed in a timely manner.
Subcontractors (Specialized Experts)
Although a general contractor often has their own network of subcontractors, it can't help to know experts yourself. What types of specialized experts or subcontractors should you know? Plumbers, electricians, HVAC technicians, roofers, and insulation experts. It gives you options on quality, service, and turnaround times to ensure your project stays on track. Knowing other contractors is also ideal if you want to flip properties in multiple cities or states.
For example, if you live in Florida but have a Phoenix property that requires new insulation, knowing a Phoenix insulation installation contractor in advance saves you time. It also provides peace of mind that your investment property is in good hands.
Real Estate Agents
Some property flippers become licensed real estate agents to reap the benefits of the sales commission. While earning an extra five or six percent commission would be ideal, it's not for everyone. It can also take several years to acquire the appropriate licenses and develop industry knowledge. That's why it's always good to add a real estate agent to your network.
Real estate agents are skilled in local laws, understand market trends, know the area, and have access to a database of properties and potential buyers to help you quickly sell your flip. They work hard for you to focus on other elements of completing the project.
Hard Money Lenders
Unfortunately, most banks don't provide mortgages to real estate investors. So, whether you need money to acquire a property or to cover the cost of improvements and renovations, you'll need another financial source. That's where hard money lenders become instrumental. These are lenders that will give you cash based on the value or potential value of the property. Your property is used as collateral; you receive financing and agree to repay the balance (typically from the proceeds during the sale).
Fixing and flipping properties may have made their way to the spotlight through reality television, but it's an investment practice that's been around for decades. It has helped people accumulate monthly income or large sums of cash to fund their lifestyles and reach long-term goals. As finding, fixing, and flipping properties is a lot of work for one person to take on, the most successful investors build a network of professionals like those listed above to help lighten the load.
