Greater Palm Springs is the ultimate delightful escape for all kinds of travelers, offering a host of relaxing activities and breathtaking natural wonders. From lounging by the pool to appreciating awe-inspiring views, this sunlit paradise makes everyone feel at home from their first moment in the desert sun. With its calming atmosphere and infinite sunshine, experience true rejuvenation while flipping houses in Palm Springs.
Palm Springs: 2023 housing market overview
The median sale price of a home in Riverside County, where Palm Springs is located, is $548,157. Mortgage rates have risen in the past year. With the Palm Springs housing market being a bit competitive, homes tend to receive an average of one offer and sell in roughly 55 days. Flipping houses in Palm Springs is a sensible move for investors right now.
Finding the best property to flip in Palm Springs
Online services that allow sellers and their agents to list a property are usually where most people go house shopping. Look on the Multiple Listing Service, where anyone working with a listing agent will likely have their house listed –– and with a great buyer's agent, a buyer may be able to get early leads.
Drive the neighborhood
Getting behind the wheel is often a flipper's best bet for finding the perfect property. Keep an eye out for signs that homeowners have posted and always prioritize seeing each property in person.
Take a sign in someone's yard seriously –– this is an indication of their enthusiasm to get moving. They are determined sellers, and they want offers promptly. This tactic can also help investors find a property to rent out.
Look for foreclosures
This method of searching often gets overlooked, and understandably. Buying a house that's been foreclosed upon or seized usually means assuming a little more risk. However, the payoff can be immense.
If a buyer is searching out bargains, there's no better place than a local property auction. Banks prioritize getting rid of their foreclosed properties over profiting from them, so investors can get amazing deals. Buyers are often surprised at how quickly a rundown property turns into a luxury estate with the necessary repairs.
Looking for a great price on a house to flip in Palm Springs?
When an investor is looking for a deal on a house to flip, there's really just one rule to follow that will ensure cash is managed and no one is left high and dry. When it comes to house flipping, never purchase a property for more than 70% of the highest potential sale price may be.
Making money from house flipping is all about experience, efficiency, and knowing how to manage money –– just like any other business out there. It's important to remain realistic and stick to the 70% rule.
Analyzing house prices in Palm Springs
The 70% rule is always the bottom line –– but there are a few more things buyers can do to analyze if a property is the right property for their flip. Calculate the after-repair value (ARV) of the property –– this is what the investor may be able to sell it for –– and consider improvements that could potentially raise its worth to that ARV.
Gauge the price of any value-raising improvements and estimate silent costs by combining holding expenses, financing fees, and trading expenditures. Decide what you want the profit margin to be, and lastly, determine the desired maximum offer.
70% of the desired maximum offer gives the investor a good budget for the cost of a flip house, and now, they have a few more expenses, such as a repair budget and projections for future income, to take into consideration when looking at a property.
How to finance Palm Springs flips
Home renovation loans
A home renovation loan is a fantastic financial solution to financing flips. It can be provided in the form of a purchase mortgage with additional funds for renovations, refinance of a current mortgage accompanied by cash payout for improvements, an unsecured personal loan, government-backed options, or a home equity loan.
Hard money loans
If someone is in need of a loan, but can't access traditional financing through banks, then a hard money loan may help. This type of borrowing involves putting up real estate as collateral and is typically used for short-term deals and investments. Rather than applying to big institutions like banks, look into private lenders such as investment property financiers who specialize in this kind of lending.
Traditional investment loans
When it comes to traditional financing, the common requirement for a down payment is 20% of the home's cost. Nonetheless, if buying an investment property, lenders usually expect 30% of funds to be used as a down payment. On top of that, a personal credit score and history are essential in securing approval on the loan and determining which kind of interest rate applies to it.
How to flip your Palm Springs home so it sells
Choose location wisely
When buying a fixer-upper, always consider the area's location - not just in relation to selling it quickly and at what price, but also the target audience. For example, Palm Springs residents skew towards older adults rather than families or children, so consider if the property is close to nightlife, stores, and meeting places.
Don't go overboard with improvements
When renovating a home, it can be tempting to add the latest trends and luxurious touches, especially in Palm Springs. However, the more money one invests in lavish renovations, the higher the asking price has to be for a return on investment. Stick with essential repairs and basic features when flipping.
Start Flipping in Palm Springs
Ready to begin flipping houses in Palm Springs? Contact Omni Real Estate Group today to learn more about how to get started flipping homes in Palm Springs.
*Header photo courtesy of OMNI Real Estate Group