Savvy real estate investors have made a fortune buying homes and converting them for sale in no time. Flipping the house, as it is called, is successfully carried out in all regions of the country. If you know what you’re doing, you can make a good profit selling the house you just bought and refurbished. Let’s take a look at this lucrative trend and how you can maximize the house flipping opportunities in your area.
Popularized by the acclaimed A&E series Flip This House, home flipping has become one way for investors to amass huge fortunes in a short amount of time. Each show details the work a house flipper has to do to flip the house; at the end of the show you know what price the owner is asking will be based on a realtor’s expert assessment of the renovated property.
While much is shared on the show about flipping houses, the reality of the process is far more detailed than what can be revealed over the course of one short episode. Here are a few things to keep in mind if you plan to flip the house:
What is the market value of the house you want to buy? Have you considered the repairs to be made when submitting your bid? Knowing the cost of repairs in advance can help you plan accordingly and maximize your profits.
Is the environment promising? In other words, if you were selling a renovated house in the neighborhood, would you find a buyer right away? Also consider the market as a whole. If you buy a home during a market downturn, you may find it difficult to recover your original investment and may suffer losses in the transaction.
Once you’ve closed your home, get ready to start renovating right away. Get all the permits fast and if you do use a contractor, make sure you are both on the same page when it comes to starting and completing the project on time. Time is of the essence because the longer you hold on to your home, the more money you will have to pay for your mortgage, real estate taxes, utility bills, etc. This money will impact your profitability and should be considered when flipping houses.
When the renovation is complete, seek out a real estate professional who is skilled at generating market values for newly renovated properties. Hopefully, the market price you’re given will more than cover the cost and time for repairs as well as taxes, mortgage costs, and utility bills incurred in the meantime. Finally, consider closing costs, attorneys’ fees, and all other expenses associated with selling a home.
In the end, every dollar over your expenses will be the profit you make from home flipping. Keep detailed records to determine your true costs and you’ll soon find out if flipping houses is right for you.
