Fix & Flip - Where can you lose out? Part - 1

Fix & Flip - Where can you lose out? Part - 1

The number one thing you have to pay a lot of attention to is when you purchase the property.

The purchase price, and the closing cost. First of all, you don't want to compete with someone else who is bidding on the same property unknowingly. Because sometimes if you emotionally or stubbornly pay overprice, you may lose out at the end.

The second thing is when you're buying a property from a wholesaler, they will have you pay the seller's closing costs because they have an assignment contract and they're transferring the assignment. Or sometimes they do the same day closing with a bridge loan. So they have their closing cost, doc stamp on the deed, attorney fees and so on. They may charge you that money and that can accumulate a lot of money.

And another thing also, if you get a loan, the points charged by the lender and the other fees lender documents and so they can accumulate a high amount of money. So be careful. Just don't calculate the purchase price. Because when the closing cost is high, you may lose out because all this is going from the profit. So pay good attention to the purchase price you are buying the property for, and the sales price you're going to sell it for. Very conservatively when you calculate the sales price because don't just think the market is going to keep on going up. Just think what if the market gets stagnant? Are you still going to make that profit?

Hopefully this information will help you buy the next fix and flip property. Give me a call if you have any questions.

Post a Comment