Wilson Counselor Consultants

How to Evaluate A Real Estate Deal – (for single family houses)

There are just a few main elements when you’re evaluating a deal.

Cost of repairs needed to get it back up to good condition
The after repair market value of the property (what it’s worth and can sell for today once it’s fixed up.

If you’re going to buy and hold for a rental… you need to know what you can rent it out for and what your (mortgage payment) will be. Knowing this, makes sure you’re buying so the property cash-flows each month. There are other things you can (and should) look at too…. but those 3 are the main important things to look at first.

There are two different types of house flipping:

*An investor buys a property that has potential to increase in value with the right repairs and updates. After completing the work, they make money from selling the home for a much higher price than what they purchased it for.

*An investor buys a property in a market with rapidly rising home values. They make no updates, and after holding the property for a few months, they resell at a higher price and make a profit.

We’re mainly focusing on the first definition of house flipping and providing you with tips to help you choose the right property.

WHAT IS HOUSE FLIPPING?

House flipping is when a real estate investor buys houses and then sells them for a profit. In order for a house to be considered a flip, it must be bought with the intention of quickly reselling. The time between the purchase and the sale often ranges from a couple months up to a year.

We talk with lots of people looking to buy real estate investment properties in Dallas and surrounding areas. Some of them know what they’re doing and some of them are still in the learning process.

But, since our entire business in finding great deals and often passing those deals onto real estate investors like you at huge discounts, I thought it would be a great idea to share with you some resources on how to effectively evaluate a real estate investment deal. This works in any market, Dallas, Texas and surrounding areas or any other states across the country.

What it really boils down to is evaluating a real estate deal is a pretty simple process. If you’re looking to buy real estate as an investment, wholesale properties, hold them for rent or whatever, one of the most important parts is buying it right (i.e.-not overpaying)

Home flipping tends to be more profitable in economically distressed areas, which may partly explain its popularity in the greater Dallas area.

Prices, however, are still relatively low. Flipped homes were purchased for an initial price of $69,524 on average last quarter, up from slightly more than $60,000 in the same period last year. Despite the increase, the return on investment from flipping rose 11 percentage points, to 51%. Low prices in the region made it easier for flippers to pay in cash. More than 50% of sales were paid in cash so far this year.

Welcome to Wilson Management Group Inc!

We are full time property investors in the greater Dallas area, and we specialize in finding those hidden house deals that you normally only hear about – usually at 30% – 50% off retail value, or more!