Achieving Financial Independence through Real Estate Online

What is financial independence?

Financial independence is basically being in an economic state that allows you to live comfortably without having a job.

Unless you win the lottery, are a student living with your parents, or have a nice trust fund set up for you, you likely are among the working class. Even if you don’t fit within any of these groups, there is another way you can become financially independent.

How can you achieve financial independence through real estate?

Housing flipping is the practice of purchasing a home with the intention to quickly resell it for more. To be considered a flip, the property must be bought and resold within a 6-12 month period. There are two types of home-flipping.

Holding

Home holding is when an investor buys a home and does nothing with it until the state of the real estate market is doing well. This way, they’re able to sell it for a higher price without actually having to put money into it.

Renovating

Often times, the landowner or real estate agent will renovate and modify the home to ensure that they get a good profit. With the right renovations, the value of a home can significantly increase

How To Make House Flipping Your Job

Before you get too immersed in this process, you must understand that it can either go very well or very poorly. It is imperative that you don’t go in with a mindset of instant and total success. Additionally, you need to first make yourself financially stable enough to live the life of a home flipper. Listed below are steps you can take to start off your journey into financial independence:

Finance With Cash

As mentioned before, sometimes home flipping can go south. It would be advised that you invest in a piece of real estate so that your credit has no way of becoming affected.

If you do pay for the home through mortgages, you could end up in serious debt. By the time you’re able to pay off the house, you’ll owe thousands more in interest fees. Additionally, you may become desperate to sell your house for profit, causing you to lower the price, thus defeating the whole purpose of the flip.

Understand the Circumstances of the Market

To be successful in re-selling real estate, you will need to grasp a good understanding of the conditions of the market, as well as what those conditions mean, and how they change.

If you aren’t able to accurately determine how much a home is worth, you may end up buying your first flip home for too much,or end up selling it’s renovated product for too little. Before starting off the process, you should contact a professional who can conduct a comparative market analysis for you.

Creating a Budget

Before even moving into a home, you need to estimate how much you believe repairs will cost so you can save accordingly. If you end up trying to scrounge up money after purchasing, you will likely have to find a job, which defeats the whole purpose of trying to become financially independent.

Aside from renovations, you will need to ensure that you have enough money to hold you over while you’re working on the house. Factors to save for include bills, food, and transportation. If you run out of any of these assets, you will need to get a job, thus failing at the initial goal you set.

Renovate

After ensuring that you have all the correct monetary assets and have found a suitable flip home you will need to promptly begin flipping so that you’re able to sell it as quickly as possible.

It is important to only pay for necessary renovations. You should be making the house look more appealing, so it would be wise to update flooring, counters, lighting, fencing etc. Avoid simply adding fancy devices, because, in the end, most people will feel they can live without them, which will cause you to end up wasting money.

Things to Avoid

As mentioned before, some people may find home flipping to be a complete fail. Listed below are some things you should work to avoid so that you’re able to come out successful.

Poor Financial Pool

If you try to become financially independent through home flipping, you will need to ensure that you have a nice cushion of cash beforehand. Otherwise, the well will run dry, and you’ll end up having to work either way. The money you collect should account for all areas of living, not simply your quarters.

Bad Timing

It is crucial to determine whether both you, as well as real estate market, are in good enough condition time-wise to be flipping a home. It requires a lot of physical labor and dedication.

In regard to the market, sometimes it just isn’t a good enough time to be selling a home. Some seasons have more buyer activity, thus making them better seasons to sell in. Always plan your buying and selling times according to one another. If you intend to sell in the spring and as fast as possible, it’s advised that you buy in the fall, seeing as it is roughly sixth months before. However, if you intend to take a while renovating a home, and you’re looking to sell in the summer, you should buy the flip house a year in advance.

Lack Of Understanding

Having a misunderstanding of any of the aspects of home selling can be very detrimental to your success. If you’re uncertain of what specific process cost or require, you may end up being gypped or overspend.

Be sure to fully look into everything about loans, selling/buying seasons, necessary renovations, location, and just the process of home flipping in general.

Lack of Skills

Sometimes failure can simply be the result of not having the required skills to flip a home. Typically, flippers often have knowledge of plumbing, painting, or carpentry. In understanding this information, they’re able to use home flipping as a side job, and do so easily.

If you aren’t knowledgeable about any of these skills, you’ll want to look into researching them, find someone who is, or consider skipping out on using house flipping as your career.

Lack of Patience

Often times, as individuals are unable to sell a home, they lose patience and sell their property for less. Not only does this make them lose out on a bunch of the money invested with, it makes the whole process futile.

Be patient, and the process will reward you.

Choosing The Right House To Flip

You will need to thoroughly search through all of your options, whenever it comes time to find a home that’s best for you. Several websites allow you to search and access MLS listings, in order to facilitate your search for homes to flip.

When finalizing your decision of which home you should choose, there are several factors to look into. Such factors include:

Location

Location matters! Even if you’re able to fix up a house, if it’s in a rundown neighborhood, it won’t sell for much more than what you bought it for.

We recommend finding a really nice neighborhood with great nearby amenities and buying the cheapest house in it, even if it is the smallest. As you begin to renovate and make it more beautiful, you’re bound to sell it for more.

For example, in certain cities such as Chicago, Illinois, renovating a home in neighborhoods like Logan Square can provide an excellent ROI by listing the property on the MLS.

Size

Despite you’re preconceived notions, size doesn’t always matter. As long as a house is among others that are in pristine conditions, and is within the vicinity of desirable locations, it will sell for more, as long as you renovate it correctly.

Fixability

When looking at homes to flip, you may be tempted by those of extremely low prices. Don’t be fooled though, because these homes likely have many issues that you’ll end up having to pay for in thousands to fix.

Before settling on a home, create a cost-benefit analysis to determine whether the input is worth the potential output. If it isn’t. Don’t lose hope. The perfect flipping home is out there somewhere!