How to get started flipping Boston condos for sale. Hint its not as as easy as it’s shown on TV
Every so often we get clients who call us with interest in investing for the hopes of flipping Boston condos for a profit just like they saw on TV. Unfortunately, those shows have only smidgen of truth. The truth being that there is often drama but it’s rarely playing out like it is on the TV show.
What’s Your Goal
Had a person on friend ask you about investing. That’s it, not investing in stocks or investing in real estate, it was just investing. So naturally, everyone posted anything that came to mind from 401K, to IRA to Real Estate. As the cheshire cat would say, “if you don’t know where you’re going, anywhere will do.” Before diving into Boston condo investing you should consider your ultimate goal. There’s really two main options in real estate investing, doing it for passive income or “active” income.
Passive Income
One of the best parts of buying Boston condos for sale is that you can rent it out. The property value typically grows (over long periods of time) and you receive and income (they call these income properties). Depending on your cash flow you buy several Boston Beacon Hill condos and rent them out. You can grow that over time and it’s a great wealth builder. Many newer investors don’t realize they are getting into property management when they decide to the DIY route on the investment side of things. We recommend you hire a property manager.
Active Income
When clients wish to flip Boston condos for sale they are getting into active income. It’s not just a word for this blog post, but it’s really how the government sees it too. See flipping is usually going to result in short term capital gains. It gets taxed at a significantly higher rate than long term gains. Basically when you flip, you’re wanting to buy a home for X and sell it for Y with Z being your profit left over. The best investors in the world that stay in flipping (many get out asap) do so with this main thought, “how can I turn my money over.” What they mean is that how often can they take their capital out and use it, make a profit and do it again and again. Essentially this is the part of real estate that’s kind of like a job.
To Excel At Flipping You Need To Be Able To Do …
- Evaluate the Value of a property. This is HUGE. How do you know it’s a deal if you don’t know the value
- Find Deals – sounds simple but in reality the deals that leave enough profit for you to fix and sell is very few.
- Acquire the Deal – In the flipping world you likely aren’t going to be able to get a loan, speed is what gives you leverage.
- Fix the property – Sorry HGTV, but most of the flippers I know use contractors and very few touch the work themselves. The Property Brothers might as well be the fairy brothers because they don’t really exist.
- Market the property – hopefully when you made the repairs you also updated the home to what buyers want and you take great photos or hire a great agent.
- Sell, Close and Do it again – many clients are lured in by the prospect of earning a lot of money and while the profits ARE often greater than any other investment, there’s a lot of work involved, like a real job.
The biggest challenge to Flipping Boston condos for sale
Building a dream team. You can often find a savvy agent, but the contracting crew is what’s going to get you.
If you’ve ever had work done on your own home, you probably know that finding great, affordable contractors can be harder than finding the abominable snowman. The mediocre contractors can be cheap (or not) but might not be able to get the job done to your satisfaction. The really great contractors are expensive and very busy. Ideally, you want to find a happy medium.
It’s the biggest challenge in my mind. On your first flip we recommend paying for a general contractor and watching what they do and taking great notes. It might be worth it to take less profits and learn more on the very first one. As you continue to flip you’ll eventually find out that even the best contractors have bad days and you’ll be called upon to replace them or be the GC yourself.
Getting started in flipping Boston condos for sale is a daunting, frankly almost full time task. However, if you have a clear goal and a good team of supporters around you then you can make it work.
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