Emanuel Rivero from the Conway area asks-“If you’re an investor looking to purchase a home at auction, how would a realtor help you flip the house for rental or sales income?”
A sales agent can you help you at every stage of the process.
-Even prior to purchasing a home for a “flip”, an agent can help you decide what price would be fair, or profitable for neighborhood.
-Once you purchase the property, an educated sales agent will be able to tell you what the neighborhood would require, as far as repairs, modernization, features, etc. to be marketable.
-An investor will want to project what a fair rental amount or fair sales price would be, once all of those repairs and alterations were made. Again, your agent can run statistical reports and pull area comparables that are likely to indicate the value of the property once repaired.
-It would be important to know what your “ceiling” is in the area so as to not over-improve the property or minimize the return by spending more than necessary on the improvements. Your agent can pull competing listings and let you know where you need to fall so as to not become the big fish in the little pond.
-Finally, a talented sales agent can help you market your investment by offering access to the thousands of other realtors who share the same MLS, canvasing the neighborhood, holding open houses, and using a myriad of tech savvy tools.
It is important to understand market trends on both a micro and macro scale when trying to determine the feasibility of an investment for either sale or rental. For instance, while one might think that a market with a shortage, such as the one we are currently experiencing, is a good time to be an investor, it is likely not the best case scenario. A shortage of supply drives your initial investment cost higher and provides a lower rate of return on your repair investments. This type of market has likely already seen a dramatic increase in market value and may turn buyers off with the perception that the market would not favor them. The best time to be an investor is at the beginning or middle of an upward trend. That was a great question, Emanuel, thanks for sending it in! You are now the proud owner of a Metropolis Real Estate Solutions, LLC double insulated cool cup and we hope that we’ve answered your question. If you ever need any assistance determining the feasibility of investment, please feel free to give us a call.