Are you thinking of buying property in Washington State to flip it and turn a profit? Right now house flipping has become a trend in many cities as a quick way to make money in this harsh economy. If you are considering this risky endeavor, there are some basic rules you need to adhere to so you do not lose money.
The 90 Day Flip Rule
Recently, the FHA has discontinued its 90 day flip regulation. The 90 day flip rule stated that a property purchased could not be bought and sold within 90 days, so that whoever purchased the house would have to pay for the mortgage for the first 90 days no matter what. Just recently, the 90 day flip rule expired and there is no sign that it will be renewed anytime soon. This is very good news for house flippers because they can now buy a property and re-sell it without being forced to pay the mortgage for 3 months.
Budget Your Flip
Nobody going into a flip ever expects to increase their budget for renovations, but it happens almost every time. If your budget is limited to a specific number, make sure to plan accordingly. If, for instance, your absolute maximum is $50,000 then only plan to use $30,000 of that money and leave the rest for unexpected repairs.
Plan Your Open House Wisely
If you have an end date in mind for the sale of the house, plan your open house accordingly. If you need to sell your house by the 15th, do not plan your open house for the 14th and hope for the best. Give yourself plenty of time to have the open house and entertain multiple offers. Also pay attention to other open houses in the area to determine of there are any houses for sale in direct competition with your home. If there are homes for sale that are less expensive than yours in the same areas you may want to revisit your asking price.
Whether you are a first time flipper or a veteran with several properties bought and sold under your belt, it’s important to pay attention to the climate of the housing market of the area you want to buy in. Also keep in mind which Washington and Seattle mortgage company would be best to use as a lender. When determining how much time to give yourself for the flip, always expect the process to take longer if you are a Washington State first time home buyer.
Have questions? Sammamish Mortgage is a local, family-owned company based in Bellevue, Washington. We serve the entire state, as well as the broader Pacific Northwest region. Please contact us if you have mortgage-related questions.