You got a great deal on an investment property. You spent countless hours going back and forth with contractors and subcontractors. You’ve matched and picked out paint, the perfect paint. You’ve pulled teeth to get permits. All the new appliances are in and the final touches to the landscaping have been made. It’s time to cash in on all of your hard work and reap the rewards of you flip.
Before you start making your way to the closing table, we’ve put together a checklist for selling your flip that many investors will overlook. This list will be a great resource for any investor to cross reference before their flip hits the market.
List of all upgrades
The upgraded features of the property might seem obvious to you, but do not assume anything. Especially with big ticket items that are out-of-sight such as HVAC, roofs, electrical and plumbing. Put together a list of all upgrades that have been completed. Print this list in a nice format to leave in a visible spot in the house. Also give the list to your broker or listing serivce to include in the MLS attachments if possible.
Many states, such as Texas, require delivery of seller’s disclosure notice of property condition. Usually these disclosures are required within a certain amount of time after getting the house under contract. Having these documents available or even presenting them upfront to buyers can help eliminate the possibility of a contract failing through.
In order to transfer ownership of a property from a seller to a buyer, a title company will have to ensure property owned by an organization, such as an LLC, is properly signed for. This is done by reviewing the organizational documents of the entity that the property is registered under. Too many times closings have been delayed or even jeopardized unnecessarily by sellers scrambling to get organizational docs at the eleventh hour.
Pro-Tip: If there are multiple or nested entities associated with a property, organizational docs for each entity may be required.
A clean usable survey will be required on most transactions. By presenting this upfront in the MLS through your broker or listing service, a seller can relay sense or assurance to any buyers or buyer’s agents. A new survey can take up to a few weeks to get back, so if you are certain that you do not have an existing survey that will work, you might consider getting a new one upfront to avoid delays or needless negotiations later on.
Getting professional real estate photography can increase your sales price by thousands and decrease the time it takes to sell. If your marketing plans (as discussed later) include a broker or listing service, they should include professional photography. If they don’t already, ask them to. If you are a professional real estate investor, there really is no excuse for not having professional photography.
Pro-Tip: Get your photos taken before your are ready to list or hit the market.
Even if you did your homework on a property before you purchased it, you will need to make sure that you have the most current market analysis to make sure you are priced correctly to achieve your goals. Things may have changed, or the make-ready process could have taken longer than expected. Newly listed or sold properties can drastically influence the current market value of your investment. Either reach out to your broker or update your market analysis by searching for sold or active comparable properties.
By this time you should already have a good idea of to whom and how you will be marketing your flip. Chances are that you will be wanting to get your listing in the MLS and on to the major MLS websites. After all, most buyers will come from these avenues. In order to accomplish this, you can either list with a real estate broker or use a listing service. If you are listing with a broker, make sure that they will be available on your timeframe. If you are using a listing service, make sure that they include the tools and services that you want.
By making sure that you have addressed each one of these items, you will increase the chances of maximizing your profit through a higher sales price. You will also help mitigate costly delays or contract hiccups leading up to closing.
Real Estate Real Fast EP1 (with Romney Navarro, hard money lender expert and CEO of Streamline Funding)
If you’re looking to do some serious real estate investing, you might be interested in using a hard money lender. While most homeowners go with conventional financing, a hard money lender can be more useful for buying and selling properties.
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