HERLIFE Magazine

the current values of surrounding homes,recent sales trends in the area–average timehomes are on the market,–etc. and get toknow the neighborhood in general. It is alsoimportant to hire a qualified inspector toevaluate any property before purchasing tomake sure there aren’t a lot of code violationsthat require extensive costly repairs.Determine the right purchase price. Yourtotal investment in the property, includingthe purchase price, closing costs, renovationcosts, holding costs and selling costs,shouldn’t exceed 80 percent of its estimatedresale value when home values in the area arerising, 70-75 percent when home values aresteady and 60-65 percent when home valuesare decreasing. The general consensus seemsto be that your goal should be to earn at least20 percent for your time and effort invested inthe project.Create your renovation budget beforeyou buy. Take the time to determine thespecific renovations you would like to make tothe property and get estimates from contractorsbefore purchasing the property to ensureyou allocate and borrow adequate funds. Youdon’t want to run out of money in the middleof the project.Allow adequate time for the entireprocess. It is recommended that you allowa minimum of six months from closing toreselling the property, and perhaps even ayear depending on the market where youlive. Things always take longer than youmight think and there are always unexpectedglitches that delay the process, so plan yourbudget accordingly to ensure you will be ableto make several months of mortgage paymentson the property should it take longer to sellthan you had hoped.The process of flipping a house whendone properly is clearly a long-term projectthat requires careful planning, adequatefunding and thorough research to minimizeyour risk. To learn more about your local realestate market and trends, visit sites such aswww.RealtyTrac.com, www.Trulia.com andwww.Zillow.com which can provide valuabledata on home values and foreclosures in yourarea. ■HERLIFEMAGAZINE.COM 111