If you are thinking about making money flipping real estate in Ontario you have the ability to earn a very good income doing something fun. While the opportunity to make money in real estate is viable you need to have a systematic approach to sourcing for properties, determining their suitability, coming up with a competitive offer and saving money doing the renovation work.
Identifying Suitable Properties to Flip
The first thing you need is a supply of properties that are for sale at a discounted price. While the various real estate listings are an option you are competing with other property flippers so the competition could be fierce. Another option is to look at the obituaries in the newspaper and while it may sound macabre the properties of the recently departed will be going up for sale in a matter of weeks or months so you can check out the properties in advance to determine whether there are bargains to be had.
Another potential source of referrals is by speaking with trades people who work on properties. A well-established Etobicoke plumber may be able to let you know about properties that recently had a major plumbing job performed or sewer backed-up. The Etobicoke plumber would also know whether there are good properties going to be put on the market soon. You will need to speak with as many plumbers as possible and during the course of your conversation with them mention how you will need their services when you purchase properties to renovate and flip.
Coming Up with a Competitive Offer
When you identify a property that you find appealing you will need to come up with a competitive offer. The golden rule to follow when bidding on a property is to never pay the asking price. You will need to find out what comparable properties have sold for in the last 60-90 days as a benchmark. If you don’t have access to that information your real estate agent can provide you with it. Look at the average asking price compared to the average square footage and that would give you the average cost for a square foot of real estate in the area.
Now that you have the average you need to get a bargain because you will be flipping the house for resale in a few weeks or months. Look for reasons to bring down the value of the property, perhaps the house is in need of structural renovations. The landscaping is not well defined or the home is quite old and requires extensive renovation. These arguments will drive down the perceived value of the home and should help you get the lowest possible asking price. Once you have come to a price that works for your budget you will need to move fast with the renovation work. With each passing day your capital is tied up in the property so the sooner you can renovate it the quicker you can sell it for a profit. You need to be proactive so you always have homes in your pipeline you can buy, renovate and flip.