Do you wonder what flipping houses in the real estate market mean? Perhaps you have a little idea about it and want to know how to flip houses for a huge profit. Regardless of your background knowledge, let’s join the club!
Flip houses can be super profitable, and it’s not a bad investment strategy for people who are completely debt-free.
Seems simple enough, right? Well … maybe not!
House flipping can also be risky, and it takes a lot of work.
So, before you officially pull the trigger, let’s go over some of the basics of how to flip a house so you know exactly what you’re getting into.
Without further ado, here’s our beginner’s guide to house flipping.
Flip Houses
When it comes to flip houses, the age-old adage of “buy low and sell high” encapsulates its essence perfectly.
The primary objective of flipping houses is to sell the property at a significantly higher price, resulting in substantial profits.
Imagine taking a neglected treasure and lavishing it with a glamorous makeover, transforming it into a shining star in the real estate market!
However, let’s be more accurate and give you the two different types of flip houses:
- The first type involves an investor purchasing a property that has the potential to increase in value through strategic repairs and updates. Once the necessary work is completed, they sell the home at a significantly higher price than the initial purchase cost, reaping a handsome profit.
- The second type centers around an investor acquiring a property in a market where home values are rapidly on the rise. In this case, no updates or renovations are made. Instead, the investor holds onto the property for a few months and then resells it at a higher price, capitalizing on the market’s upward trend and generating a profit.
Flipping houses may sound simple, but it’s not as easy as it looks.
In the next part, we’ll shed light on how flipping houses is making money and how it works.
How Much Money Do I Need To Flip a House?
To make informed decisions, many individuals seek the assistance of a professional appraiser to assess the property’s value.
Additionally, they rely on a widely utilized principle known as the “70% rule” to determine the feasibility of a fix-and-flip venture and its potential profitability.
Curious about the 70% rule?
Allow us to enlighten you in the next part!
70% Rule In Flipping Houses For Beginners
The 70% rule advises investors to limit their purchase price to a maximum of 70% of the property’s estimated after-repair value (ARV), which is the potential value of the home after it has undergone complete repairs.
This rule takes into account the necessary repairs and deductions from the ARV. Now, let’s dive into the mechanics of how this rule operates.
Let’s say there’s a house you think you can resell for 6,000,000 EGP after you’re done with repairs and renovations. Start by multiplying 6,000,000 EGP by 70% or 0.7.
6,000,000 EGP x 0.7 = 4,200,000 EGP
Now, let’s assume it needs 2,000,000 EGP in repairs. To figure out the maximum price you should pay for the house, subtract 2,000,000 EGP from 4,200,000 EGP
4,200,000 EGP− 2,000,000 EGP = 2,200,000 EGP
That means the purchase price of the house needs to be no more than 2,200,000 EGP.
Don’t forget to factor in time and taxes, because they work hand in hand and can have a big impact on your bottom line.
However, one might ponder: does flipping houses truly yield significant profits and prove to be a wholly lucrative endeavor?
At Nawy, we’ll offer candid perspectives.
In the forthcoming section, we’ll touch on the pros and cons of the flip houses.
Flip Houses Pros. & Cons.
Flip houses as a trend have continued to gain speed since 2005. But is flipping a good business strategy for you? That’s what all the real estate investors will be known further. So, let’s start with the Flipping House advantages.
Flip Properties Cons
- You can Make a Quick Profit.
According to the latest data, proficient house flippers have the potential to achieve an average profit of 26.9% on their ventures. Several factors contribute to maximizing these gains, including:
- The property’s location.
- The method of buying a property.
- The state of the housing market.
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You Will Develop an Understanding of Buyer Needs.
With the flipped homes action, you’ll be aware of and understand the repair plans and optimize expenditure, increasing profits. Moreover, you’ll bolster your confidence for future flips and help you spot opportunities.
- Flipping Houses Is a Safer Investment Option.
Engaging in house flipping can be regarded as a relatively secure investment strategy with a great return on your investment.
Even in the event of a decline in property value during a real estate market downturn, such circumstances typically endure for a limited duration.
Flip Houses Pros.
- You May Have to Pay High Holding Costs
Unanticipated costs have the potential to erode the profitability of a house flip significantly. So, failure to carefully allocate funds for these expenditures can swiftly transform the venture into a financial sinkhole!
But, here there’s someone will ask: “How to start flipping houses?” That’s what we’ll be answering below.
How To Start Flipping Houses?
- Find the right property.
- Pay for the Flip with cash ( No mortgage payments, No rush to sell, No debt to hold you back).
- Get guidance from a local real estate agent.
- Make a budget for your house flip to avoid the financial risk.
- Invest in smart renovations
Are you someone who purchases a property? Or someone considering the sale of your unit, rest assured that Nawy is here to assist you every step of the way.
Real Estate Investing With Nawy
Nawy is a leading proptech company in Egypt. We offer you a ton of upscale compounds where you can find your dream residential or commercial unit.
With a dedicated property consultants team, rest assured that they will help you find the best deals. And the best part?
We offer you many exclusive services and the best example is Nawy Now, allowing you to buy your unit right now and pay later.
Whether you’re looking for a unit to purchase or want to sell it, want to purchase a property in New Cairo City, or perhaps tend to own a beach house in the North Coast, there’s something for everyone.
In the upcoming section, we will check the finest compounds in Egypt where you’ll be flipping a house or even selling it for a profit.
Best Compounds In Egypt
Now, we’ll list some of the upscale projects in Cairo where you can find resale and primary units. Not just the units, these compounds boast a plethora of world-class amenities that will make you live life to the fullest.
Best compounds in El Sheikh Zayed & 6th Of October City:
- ZED by Ora Developers
- Vye by Sodic Compound
- Emaar Misr Cairo Gate
- Forty West by Sodic Developments
- Casa Sodic compound
- Zayed Regency by Dunes Capital Group
- Karmell New Zayed by Sodic Developments
- Rivers by Tatweer Misr
- Green 6 by Mabany Edris
- Majorelle by El Gabry Developments
- Terrace by Housing and Development Properties
- Naia West by Naia Developments
- Dejoya Residence by Taj Misr Developments
- Al Karma 4 by AlKarma Developments
- The Estates by Sodic Developments
- Walk Of Cairo by Bonyan for Development and Trade
- Ivoire Zayed by PRE Developments
- Westtown Hub by Sodic
- Greens by Dorra Group
- IVY by New Giza
Best Compounds in New Cairo City:
- Mountain View Hyde Park.
- The Waterway compound.
- Lake View Residence.
- Eastown Residence.
- Villette Compound.
- Hyde Park Compound.
- Lake View Compound.
Tend to buy and sell a beach home? Then it’s high time to take a glance at the best resorts in North Coast listed in Nawy.
Top Resorts North Coast
North Coast is well-known for its countless resorts that come with stunning views and endless amenities that will make you spend a memorable vacation. It’s also a fact that buying and selling real estate units in the North Coast will have a great return on your investment journey.
The best resorts in the North Coast include but are not limited to:
- Silversands by Ora Developers
- Hacienda Bay by Palm Hills Developments
- Jefaira North Coast by Inertia
- Bo Island North Coast by Maxim Development
- Mountain View Ras El Hekma by DMG
- Seashell North Coast by Seashell
- Amwaj North Coast
- Telal North Coast by Roya Developments
- Sea View North Coast by Jdar Development
- Fouka Bay by Tatweer Misr
- North Edge New Alamein by City Edge
- Hyde Park North by Hyde Park Development
- Hacienda West by Palm Hills Developments
- Golf Porto Marina by Porto Group
- Azzar Island by Reedy Group
- D-Bay by Tatweer Misr
- Gaia by Al Ahly Sabbour
Overall
Are you ready to invest in flipping houses?
Whether you’re an aspiring real estate connoisseur or simply intrigued by the allure of Egypt’s property market, Nawy makes buying and selling a breeze!
For any real estate updates, insight, or even to learn about the compounds in Egypt, Nawy is your trusted partner.
Download the Nawy app, and enjoy the seamless experience.
