Buying and selling real estate, also known as flipping, is a topic that interests many people, especially those seeking a way to increase their capital. Unlike risky stock market or Forex investments, flipping offers more stable profit opportunities. Let’s take a closer look at the key steps to successfully buying, renovating, and selling a property, taking into account all financial, legal, and technical aspects.
Who can flip properties?
Anyone with sufficient financial resources or creditworthiness can invest in real estate. It’s possible to obtain a mortgage with a minimum down payment of 10% of the property’s value. Full-time employees earning over PLN 5,000 per month often have sufficient creditworthiness to begin their real estate journey.
If you have doubts about your creditworthiness, it’s worth consulting a credit advisor. Without affecting your creditworthiness, they can assess your financial situation and help you decide whether to invest further.
Do you need a business to flip properties?
Large-scale property flipping typically requires running a business or investing through a partnership. However, a one-time purchase and sale of real estate every few years can be done in your own name, without the need to establish a company. It’s worth remembering that taxes are paid on the profit, not the property’s total value, meaning that even after taxes, you’ll still be left with a significant portion of the profit.
Sources of financing
You can finance a property purchase in several ways: with your own funds, with a mortgage, or with capital raised from family or friends. You can also team up with investors who have capital, allowing you to flip jointly without having to commit the full amount.
How to choose the right property?
When choosing a property, you should consider three main criteria:
- Financial Aspects: Create a thorough cost estimate, including the purchase price, renovation costs, brokerage, and any notary fees. All of this should be carefully calculated to estimate your potential profit.
- Property Features: There are many factors that influence the value of a property. The most important include location, building condition, size, layout, and construction materials. Make sure you choose a property with the right features that will increase its market value.
- Legal Aspects: Carefully check the property’s land and mortgage register to ensure there are no encumbrances, such as mortgages, liens, or easements. It’s also worth ensuring that the seller has all the necessary documentation, such as a certificate of non-registration.
Real estate purchasing process
After selecting a property, the next step is signing a preliminary agreement, which involves making a down payment on the property and applying for a mortgage. Once everything is ready, you schedule an appointment with a notary to sign the deed of sale. The notary is responsible for verifying all legal aspects of the transaction, ensuring a secure process.
Renovation and sale
After purchasing the property, the renovation phase begins, which should be carried out based on a detailed design prepared by an architect. The design should include dimensions, room layout, and materials that will be used during the renovation. The next step is to find a renovation team that will complete the work according to the agreed schedule and budget.
Once the renovation is complete, the property must be properly prepared for sale – home staging should be carried out, i.e. ensuring the aesthetic appearance of the interior, and then an attractive sales advertisement should be published.
Summary
Buying and selling real estate is a process consisting of many steps, but each one can be carefully planned and executed successfully. The key to a successful investment is proper preparation, financial and legal analysis, and collaboration with the right specialists. If you have any doubts, you can always benefit from the knowledge of experienced investors, participate in training courses, and gain even more knowledge on the subject. If you’re curious about how to flip 100 houses, read a recent interview with Mariusz Ostapowicz.
Learn more by taking free training at jakflipowac.pl
