Florida real estate flipping can be a lucrative side business that eventually becomes a full-time position. If you’re looking for the finest locations to fix and flip houses, Clearwater can be a good fit for you as the average annual population growth in Clearwater during the past ten years has been 0.61%. During this time, the state average was 1.25%, compared to a national average of 0.69%.
Over that time, Clearwater’s population increased overall by 5.53%, compared to the state’s average growth rate of 11.27% and the national growth rate of 6.23%.
Fixing up and enhancing properties is a terrific method to advance in the property market. For instance, the average home value in Clearwater at the moment is $191,600. These properties can be fixed up affordably for both first-time homebuyers and foreign investors who want to profit from their investments.
How Does Flipping Houses in Clearwater, Florida Work?
Flipping houses in Florida is a lucrative opportunity for real estate investors. Here is how to get started with house flipping in Clearwater, Florida.
Step 1: Create a Budget
Only 70% of an estate’s after-repair value, or ARV, should be paid, less any required repairs. The house flipping 70% rule is another name for this.
Let’s assume for the sake of simplicity that a property has an ARV of $100,000 and requires roughly $10,000 in repairs to replace some of the flooring, reroute a few straightforward pipes, and touch up some paint.
$75,000 is the ARV’s 70%. The $80,000 ARV is reduced by the $10,000 in repairs to leave you with $70,000. You should therefore aim to spend no more than $70,000 on the investment property.
Step 2: Investigate Local Areas
It is generally advised that you work with a real estate agent, especially if this is your first attempt at a flip. A realtor can assist you with several tiny nuances that you may not have even considered because they are well-connected and are aware of the best, most lucrative properties on the local market. They can also guide you through shifting real estate markets, which is a tremendous asset to have on hand.
It’s OK and suggested to conduct a significant amount of the research yourself even if you have an experienced realtor on your side.
Start by doing some study on Florida’s various regions. For instance, one of the best destinations to relocate in 2022 was South Florida. South Florida is experiencing a surge in new inhabitants looking to buy properties as a result of the growing popularity of working from home.
In Clearwater, take into account the expanding shoreline and generally steer clear of waterfront houses. These homes can be more difficult to sell and are more likely to sustain water damage from hurricanes and floods.
Find flood plains and flood zones, and stay well clear of them.
Finding an area that hasn’t experienced a growth spurt yet but is quite likely to do so around the time you’re ready to sell would be your best course of action. Here’s where thorough research and a little bit of luck are useful.
Step 3: Accurately Assess Your Time, Commitment, And Skill Sets
Being completely honest with yourself now will help you avoid a lot of time, money, and headaches later on.
Do you have the skills to carry out many of the required repairs? Are you willing to invest the time in learning if you don’t? Can you afford a schedule delay or a do-over if you make mistakes? How long can you wait? Have you found a mentor to guide you? Are you able to pay for a mentor?
How long can you dedicate to investing in real estate? Do you have a flexible or rigid timeline?
Now is the time to decide how involved you want to be in the job and to informally lock down a timeline.
Step 4: Determine and get financing for your flip project
The residence is available for an all-cash transaction. You can inquire with a lender about a flip loan or apply for a more conventional loan with 20% down. Another choice is hard money lenders in Clearwater, who can set you up with a non-traditional loan. Hard money loans often have a term of six to twenty-four months, as opposed to the fifteen to thirty years of standard home loans.
One of the finest methods to get started with property flipping is through private money lenders. They are essentially banks without all the paperwork and hurdles. Private lenders’ only drawbacks are their potentially high 6% to 14% interest rates, charges, and other expenses.
Flipping investors is an additional choice. Thy can provide the finance, and they frequently have helpful suggestions for novice home flippers. However, you still need to contribute a lot of value. It’s essential if you want to make this relationship successful that you can find bargains on your own or that you have a network of highly valuable contacts.
You should also work on your flip project’s exit strategy. Do you intend to rent out the home using the BRRRR method? Or would you like to recoup your investment by selling it after renovation and move on to something else? Consider these opportunities as you consider your options.
Step 5: Assemble Your Team
You should seek out a mentor, a lender, a real estate agent, an attorney, general contractors, and workers (if you want the help). Get these individuals ready before you buy your property so that you can get started as soon as you receive the keys. This shortens the timeline and relieves a lot of your worry.
You’ve probably noticed how frequently I bring up stress; I do this because, although being a gratifying and successful real estate business, house flipping is also difficult. When it’s possible, try your best to reduce the stress.
Have your general contractor inspect the possible property before buying it, if you can. This enables you to quickly connect with the appropriate experts and better plan for the required repairs.
Step 6: Choose and purchase the investment property
Investing in distressed, short-sale, foreclosure, and fixer-upper properties typically yields the biggest returns. To completely recover, they typically also need extra money or labor. Discuss the numbers with your mentor, the real estate agent, and the contractor for each house you are considering. Just as important as the required funding is the right timing to sell the property.
Step 7: Begin accumulating your sweat equity
Sweat equity is a fantastic weapon if you’re new to property flipping or have more time than money.
You can complete some of the manual labor tasks that the property demands, even if you don’t feel confident or competent doing them all. Most amateurs are capable of performing jobs like painting walls, resealing bathtubs, cleaning and restraining cabine÷try, scrubbing floors, and even installing new floors.
You can re-grout floors, clean the backyard pool or power-wash sidewalks while an electrician repairs the wiring or fuse box.
You can also shoulder the weight of the essential mental work, particularly if you have an investing partner. A part of the procedure also entails menial but necessary mental labor.
Step 8: Rent The Home Out Or Sell It
You can generate residual revenue from renting out a house you’ve just flipped that will pay you each month you own it.
You can quickly and easily receive a one-time lump sum of cash when you sell a flipped house, which you can use as you like.
Consider employing a property manager if you decide to lease the property. A management company can protect you from laws and regulations that you might not be comfortable with, particularly if you are not from the area, making your rental income genuinely passive.
Make sure to engage with a real estate professional whenever possible if you decide to sell the property. When and how to place your property on the market, how and where to list it on the MLS, how to advertise it, and how to make it appealing to potential buyers, they are knowledgeable about local home values, comparable home sales, local home prices, and how to prepare your home to have a higher price.
Using Hard Money Loan for Clearwater Fix and Flip Project
Fast access to finance is crucial for fix and flip investors. With the speed and flexibility you deserve, 14th Street Capital’s fix and flip loan program and hard money rehab loans give borrowers the capital they need to buy and renovate a home for flipping and complete their project without any hassle.
A hard money loan is one popular loan type utilized in house flipping. Because the lender isn’t continually checking your credit, a hard money loan could be simpler to qualify for. Additionally, hard money loans have a short term, a high interest rate, and the lenders don’t consider the borrower’s credit score. You might require a larger down payment depending on how much equity you have in your home.
Our accelerated underwriting procedure and experienced processing staff, as a fix and flip hard money lender, tout an average closing time of 10 days with a record of just 48 hours.
Conclusion
Flipping in Clearwater is a great option to earn quick money, especially if you are a beginner who wants to raise money. The real estate in the market has been strong due to an increase in population, making it simpler for you to find a buyer or tenant. However, this does not imply that you should buy the state’s least expensive property and flip it. Anywhere you choose to invest in Clearwater is inexpensive compared to other parts of Florida, your success depends on your level of knowledge, your thorough planning, and your comprehension of the approach employed.
Experience lenders such as 14th Street Capital can approve a hard money loan with less paperwork and flexible terms. So get in touch with us today!