In the land of unicorns and pink rainbows, you can devote all your time and effort to finding run-down houses, bringing them back to like-new condition, and selling them for triple your investment.
Then there is the real world. In the real world, you already have a job, yet somehow money worries are never far from mind. For many of our clients, doing real estate part time is a rational solution to the desire for increased wealth despite the time constraints of the real world.
Benefits of Part-Time Real Estate Investing
You don’t have to be a full-time house flipper to reap the benefits of buying, renovating and selling home within a 12-month period. Doing it part-time simply means that you flip fewer properties per year and each flip takes longer. Notwithstanding those constraints, you still participate in the benefits of home flipping:
- Potential for strong ROI: RealtyTrac reports a sharp uptick in ROI in the first half of 2016, with an average return of 49 percent, compared to only 27 percent in 2006.
- Potential for quick returns: Even at a part-time pace, you can realize investment returns much more quickly through home flipping than you can through stock market investing. And those returns are within your control, not subject to the vagaries of the stock market.
- Lifestyle choice: Many rehabbers simply enjoy the process of bringing a property back from the dead. The physical work and design challenges afforded by a part-time fix-and-flip project are often a welcome counterpoint to the slow pace and routine of desk jobs.
- Availability of financing: Hard money lenders like Walnut Street Finance have freed rehabbers from the whims of the banking industry. We lend money based on the property, not on your credit score. Our short term loans are affordable and flexible, and best of all, obtainable.
Using a System to Pick the Right Property
All flippers, whether full- or part-time, do best when they follow a consistent system for identifying target properties, estimating the cost and time of repair, arranging financing, completing the work and selling the property. One of the best tools for evaluating potential investments is a property repair estimate sheet, in which you quickly document the all major repair items and their approximate costs. We’re talking about significant items, such as the roof, kitchen, flooring, structural repairs, appliances, paint, etc.
As you gain experience, you learn that you don’t need an exhaustively precise estimate when preparing a repair estimate sheet. Its main purpose is to save you time and to give you confidence to go forward with the deal. As a part-timer, you don’t need to waste time measuring every room and documenting every defect, especially since there is no guarantee you’ll buy the property. Better to limit your initial inspection to 30 minutes, and save the more detailed work for when you have a strong candidate.
Working a reliable system for each and every rehab project is your best defense against costly mistakes. Using a reliable funding resource like Specialty Lending Group can easily fit into your system and provide the financial stability you need to see the project through to completion.