Flipping houses like a boss propsocial 5
Logo3 small


Image source

The legendary flip and sell strategy is a norm among every property lover out there! Some agents consider this as the way to a wealthier lifestyle. They visualise this strategy as a get-rich-quick scheme.

For those curious rookies, it’s simply a process of purchasing a house at a low price and selling it at a higher price. We’ve talked about this briefly in our previous article. The concept sounds simple but then again, is it really that easy to apply?

Experienced property investors would say no. They’d properly weigh the options they have before investing low. In fact, they’ll take their time before dipping their feet into the water.



1. The Area Before the Property

Image source

Nowadays, the property market tends to portray an expensive outlook among investors. The impact of this is a wide pool of rookie investors rushing in to invest on an affordably priced residential unit. Then, it turns out to be a terrible investment. Why? Because the township at which the property is located in isn’t strategic enough for buyers to bite. We would all love to invest in a unit within a strategic location. But, how do we define a strategic location?

Just put yourself in the resident’s shoes. As the saying goes, always picture yourself purchasing a property as someone who’s going to live in that space. This saying goes for the investors too! As a resident, what are the key amenities you would require especially for your basic needs? Grocery and convenience stores, entertainment hubs, educational institutes, healthcare centres, restaurants, local markets, public transportation and the list goes on.

Allow yourself to be in the shoes of a college student, a young working adult, a middle-aged businessman, a mother or a pair of young couple. That’s how you get into the minds of your target market! This sense of awareness will assist you when you’re investing in a property.

The idea is to purchase a property with a strategic portfolio that matches most of the common customers’ demands. With possession of a strategically located property, one should not have any issue selling off their units.



2. Furnishing

Image source

Almost every interested buyer prefers at least a partially furnished unit. This is no different with the flipping and selling strategists. If you’re in this category too, try to seek out for properties that are fully furnished or partially furnished to ease the burden on your shoulders. This is sure to save you money and time especially when you’re looking for tenants to quickly move in. If it’s a bare unit, only invest in the basics such as lights, fans, air conditioners, and others if necessary.

Take note that if you have invested in a unit due its affordable price, you do not want to overspend on furnishing to an extend that you are unable to sustain your budget in the long run. As brilliant investors would say, only spend to make more money, not spend to lose money.



3. Holding Power

Image source

Within the property scene, holding power is defined as the capability of an individual to withstand all forms of challenges, mainly financially in order to have a strong hold on their property. A property investor who wishes to flip and sell a unit must be able to pay the necessary instalment if he or she has taken up a loan commitment. This action should be foreseen in case one is not able to find tenants that can support their instalment charges. Sometimes, investors are overwhelmed by the strategic unit they possess, so much so that they fail to prepare their financial prowess to combat the potential liabilities.

In many cases, investors struggle to rent out or sell off their units for months or years, where their vacant units go unmaintained. When this happens, the costs to clean and refurbish the unit should come into consideration too.



4. The Right Price

The most important component of flipping is purchasing units at the right price or in property terms, at affordable prices! Honestly, if you were to purchase a unit for such a high price, you’ve just jeopardised your own mission to financial greatness! Every investor has his/her own formula in identifying a property that’s below market price. They all started off following the basic principles which then evolved into new-found property knowledge through age-old experiences. In other words, start with the basics!

Put your detective hat on and research on the township/neighbourhood that your property is located in. Some of the property or neighbourhood infos can be found on PropSocial’s page. You can also investigate the prices of condo units and landed homes through agents and developers. Some even attempt at calling the market valuers to grasp a better knowledge of market price within the area. Patience is the key here where it may take months before you book that unit for investment. So it’s up to each individual and their respective capabilities in grasping the market knowledge.

Here are our two cents to this. Ask for the appreciation in price valuation of the given unit. This may cover appreciation in terms of price per square feet and rental yields. This question should be directed towards market appraisers as most agents may be oblivious or inaccurate with their answers. Market appraisers are accredited valuers equipped with knowledge relating to present and probable future property prices. There is a reason why they are licensed to provide the right info when needed.



Conclusion

The Flip and Sell tale is a never-ending discussion among many property goers!

Many contributing factors may be present among different developments. However, the basics never change. You may also want to seek out a mentor to support you during tough times in the property market especially on the flipping and selling mechanism.

Are you a flip and sell expert? Do share your tips if there’s any in our comment box.



(Written by: Sathish Veera, 14th Feb 2018)


20180609 img 0016 small

@domng normally maximum is two person if is spouse/family. But if want more than two person, can be joint under a company which is established more than 2 years. 

However, in between these co-proprietors must make an agreement stated that  shares are equally hold or anyone is taking higher share on this particular property, otherwise the interest of the co-proprietor who claims to have a bigger share is not protected

K  c0392b small

In order to do flipping, the purchase must be a cash buy? If I newly purchase a hse by loan, can I flip? Will the loan lock in period affect this? 

Signature 28 logo  custom  small

@kuvan0671 

Technically speaking, if your "flipping earnings" is more than the RGPT and Bank Lockin penalty... i don't think it matters if bought by cash or by bank loan

20180609 img 0016 small

Agreed with Dominic. Nope, i don't think you can earn if you sell out a newly purchase house. It can't even cover your RPGT.