Flipping Houses in Alabama – What Do You Need to Know About Fixer-Uppers?
Flipping houses is currently one of the most lucrative businesses in real estate. While the business model is blooming everywhere in the U.S, Birmingham, Alabama is the new hot spot people are focusing on. However, there are a few things to consider before you start flipping houses in Alabama.
In 2015, Realty Trac reported an increase in the interest of the real estate investors flipping homes in the city, reporting it as one of the top 11 destinations in the US that had the potential for high yield ROI. Due to market conditions, there has been continued interest in the Birmingham area by investors to buy houses for renovation and sell.
Interested in capitalizing on this market potential? Here are a few things you should know before purchasing your first investment property.
1) Is it worth it?
Flipping homes might have been easy over the years, but in a market where there is a huge competition, you would need to be wary of the value of the house which you are going to fix. The questions to focus on are:
Would it give you a better ARV (after repair value) once its renovated?
How is the neighborhood and surrounding location?
What are other investors saying about the area? What do local realtor say?
2) Why is the property for the sale?
In some cases, you might not know the reasons why the seller is selling the property. However, in other cases where you have a notion of it, you can expect to hit on points that can help you gain a better deal. The five major motivators of the seller are a loss of job, job transfer, death, divorce, and illness. In all of these cases, you can think of your strategies and tactics to evaluate the best outcome.
3) What are the renovation costs?
How much you invest depends on a lot of factors but one of the most important factors is making it better than the rest of the comparable properties in the same region. Your goal should be to maximize your return on all the money you are investing the property.
Flipping houses in Alabama, especially in Birmingham, can indeed give you the opportunity to start off a new career if you are just starting out. However, if you are already a seasoned flipper, considering the conditions of the real estate in the city, it is equally a once-in-a-lifetime to get the best fixer-upper you’ve dreamed would give you the highest ROI.
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