In 2017, 6% of homes sold in New Jersey were flipped; this includes around 207,000 condos and single-family detached homes in total. The sales rate for flipped houses has been steadily increasing, making investors look into the activity as a possible investment opportunity.
But flipping a house has its challenges if you are new to it or doing it in a new location. Many factors come into play, such as the location and cost, making it an intimidating task.
However, when done right, flipping a property offers a great return on investments for homeowners, realtors, and investors alike for reasons we will explore further in this guide.
Without further ado, let’s get into it.
What is House Flipping?
Before you decide to venture into the realm of opportunities that house flipping offers, it is important to understand what house flipping entails.
House flipping essentially refers to the process of buying a property but selling it for more than its original price. Of course, you have to add value to it for it to be able to fetch a higher and yield a sizeable profit for the seller.
Categories of ‘House Flips’
There are different types of house flips. They are:
A simple flip refers to the investor buying a property that does have the potential of being sold at a higher price (after necessary updates and repairs are done). The investor can yield a high profit as the house will be sold for more money once it is ‘flipped.’
Holding kind of works like renting out a place. You do not invest as much and get a regular stream of cash flow. It can be a great long-time investment, depending on the market at the time and the area.
Even though wholesaling is not the easiest way to invest in real estate, it is possibly the cheapest investment. Cracking a good deal and wholesaling it can prove to be a superb investment opportunity.
Why New Jersey Is The Ideal House Flipping Market
Featuring beautiful beaches, exquisite sceneries, fantastic food, and great ROI for house flippers, New Jersey is one of America’s real estate hot spots.
The city can be a fruitful investment for you because it has many potential properties that would be great for house flips. New Jersey is a culturally diverse place, with beaches and great restaurants. The average purchase prices for homes are quite low, while revenue generated from house flipping has been markedly high for investors. That is one of the main reasons why New Jersey is a thriving area for house flippers to look at.
The real estate market in New Jersey has been seeing an upward trend since last year, and it has been projected to continue in the same manner. Single-family residences are one of the most popularly sought out in New Jersey. On average, properties are priced at approximately $155,000, with a market forecast increasing by 3.7%.
The real estate market is performing the best in the following counties in New Jersey:
• Essex County
• Monmouth County
• Sussex County
• Union County
The market is doing so well in the counties mentioned above because they offer spacious and breathtaking outdoor living spaces, while Monmouth County offers residents beach living.
It can be difficult when trying to find a house to flip, but it does not imply that you settle for anything that comes your way. That being said, you need to consider some factors before setting out to find an ideal house to flip.
How To Find Houses To Flip
Finding a profit-yielding property is important for successful house flipping. Here are some ways you can find the best properties to invest in.
Of course, realtors are the first people that come to mind when you want to buy a property. They know the business well, and one of their jobs is to follow market trends. If you hire a good realtor, they will be sure to find you the best deals to help you get the most out of your house flipping project.
It’s important to look for a realtor who understands your investment, not something all realtors do. They can guide you about the process and usually also are privy to upcoming projects.
The MLS lists properties for you to find. There are many MLS feeds that you can find in America, one being GSMLS. These systems list almost all properties currently for sale. This can help you get a better idea about market prices and level up your investment game.
There are houses featured in local listings that are not on MLS feeds. Inexperienced properties sellers may not know where to list their property for sale and may end up doing so on a website such as Facebook, Craigslist, Tapped Into, or Patch. You can find some of the best deals here.
Considerations For House Flipping
There is a process one needs to go through when starting on their house flipping journey. Here are the main things you should do when flipping a house.
Any real estate investment plan, especially that to flip a house, needs to have a defined budget. Make sure to account for:
- The price of the property
- Repair and renovation costs
- Any legal expenses
- Project completion
Experts in the construction field can help you narrow down renovation costs, repairs, and further construction. It is best to look for reputable, insured, and up-to-date contractors with all the latest home technologies and trends.
Also, it is best to make sure you reserve some of your funds in case of unforeseen circumstances.
Arguably the most fun, albeit stressful, part of the house flipping process are renovations. You should note down all the necessary renovation projects that are crucial to increase the home’s value.
To make a profit on your house flipping project, you need to be wise about the renovations and repairs you do. Focus on adding value to a property, modernizing it, and making sure it is fit to live in.
New Jersey holds real estate treasures that can be polished to give you gold. Even though house flipping may seem like a daunting task, it can be a great investment opportunity if planned carefully. Taking the help of realtors and builders who can guide you throughout the process will make it a lot easier.