When diving into real estate investing, many potential investors find themselves discouraged. You can spend the last 10 years working hard and saving every penny, but there has to be something that can make you that much in a few months.

Have you considered house flipping?

Thoughts like “I don’t meet the right qualifying criteria”, “I don’t have enough money’, or “I can’t find a property in my price range.” can be some reasons you are stuck. You’re not alone in these concerns. There is a widespread misconception about getting into real estate investing.

Many believe they need to buy the property they want, but the reality is different. You need to buy the property you can afford and work on. Real estate investing is, at its core, a business decision. For those working and saving, it can feel like you’re swimming against the tide of rising property values. It may even seem impossible to save enough for high down payments.

It is not a surprise that homeownership can be daunting when prices in Toronto are overwhelmingly high, with down payments ranging from $200,000 to $400,000. You may already be thinking, “I barely have enough money to buy a property, let alone flip it. How am I supposed to acquire a property, renovate it, and then hold it until it sells? It seems like a lot.”

But to tell you the truth, $80,000 is enough to start your house flipping journey. 

How to secure a property with just $18,750?

One strategy is house flipping in areas near the industrial sector but outside the city centre. Remember that first impressions can be misleading when considering a property for renovation. A property might appear as a complete disaster, or it does not meet your investment preferences. However, remember that a real estate investor is not a homebuyer. Suppose you’re looking at a home that costs under $375,000. In that case, it’s worth noting that you can purchase properties like this with just a 5% down payment or just $18,750 as long as you meet the necessary qualifying criteria.

However, remember that a real estate investor is not a homebuyer. Suppose you’re looking at a home that costs under $375,000. In that case, it’s worth noting that you can purchase properties like this with just a 5% down payment or just $18,750 as long as you meet the necessary qualifying criteria. However, you must know that 5% down comes with a string attached: you must obtain CMHC insurance.

It is good that this insurance, costing around 4% for a 5% down payment, won’t hit you with upfront costs. Instead, it will be rolled into your mortgage, allowing you to repay it when you refinance, sell, or add it to your monthly payments. This process will enable you to borrow some extra money and, in turn, help you effectively avoid significant upfront costs.

Simplify the Renovation Process 

With fixer-upper properties, house flipping can seem complicated. But remember to keep things really simple. You don’t want to remove plumbing and walls or rearrange anything. The goal is to enhance the space without overcomplicating the renovation process.

Kitchen revamp

With the kitchen, you can replace all the cabinets with all-white cabinets, new white countertops, and a white backsplash because this will give a nice, clean effect. Then, you can accent things to make them look great in pictures. It would be great if this aesthetic could be posted on Instagram.

Bathroom Transformation

Following the accent colours, you can use a darker floor colour for the bathroom and white tiles all along the sides to give it a deeper look because these tiles are glossy. When working with a small bathroom, having something that gives a perception of depth is good. On top of that, add a big custom glass piece for the back wall, and then add a small vanity mirror. Again, we’re not going for anything crazy. We’re just going with something that looks nice.

Living Room and Bedrooms Update

Remove any obstructing built-in closets for the living room and bedrooms because you want to leave it up to whoever’s buying the property to put their products. You can install new drywall, new floors throughout the house, new pot lights, and a nice fresh coat of paint.

Exterior Improvements

One of the most expensive things to renovate is the outside. It’s a lot of work, even the roof. You want to keep things as they are and paint them over if the condition is okay. Otherwise, it would be best to replace it. You can install new siding and replace all the windows according to the accent colour. At this point, expect to have spent a little over $50,000.

You can read about the 5 Practical Steps in House Flipping in more detail or you can watch INVESTOR RENOVATION SAVINGS! | 5 Stages to House Flipping on YouTube.

Staging a house flipping project…

The nice thing about staging a property, or making it look neat and presentable, is that you are selling a few things other than the house. The location you choose is a vital part of selecting a property because it is ideal to choose an area with generally limited inventory and where a lot of development is happening. Look for a property where you will expect things to be done around the community in a couple of years to take advantage of its appreciating value. It doesn’t matter whether or not projects around the community are finished – any family moving into the area will be able to see that there is potential for growth.

How to earn $55,000 in four months? 

Suppose you sell this property for $525,000, buy it for $375,000 and spend $50,000 on renovations. Expect around $5,000 in extra costs, about $15,000 in CMHC fees, and $25,000 in real estate commission, and you are still left with a $55,000 profit. Investing your money that you have saved while working for over 10 years now has a 70% return on investment in over four months!

Work with professionals

Successful house flipping and property renovation projects require careful planning and strategic execution across all stages. Each step, from structural modifications to finishing touches, presents opportunities to minimize costs and maximize returns. Real estate investors can achieve polished results by consolidating tasks, hiring specialized professionals, and bulk purchasing cost-effective materials while staying within budget.

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