If there is a perfect time to buy houses for flipping in this country, then nothing could be more perfect when the house prices are down and for sale houses littered across the nation. Foreclosures are everywhere and distressed sellers are selling their properties at an all time low just to entice buyers. This is the time to flip houses like you flip hot cakes.
The principle behind property flipping involves buying houses well below its true market value. These properties have slight to moderate damage on them which needs to be rehabilitated and brought back to its best condition before putting it back for sale on the market again. The property flipper makes money from the difference of the amount he sold the property and the amount he bought it.
Sound simple enough? Well, there are things that you need to consider first before you flip houses to ensure that you end up making profit instead of incurring loses. After all, it always pays to know the battle you are going into before you lift a finger to fight.
The first thing you need to know is that your success in flipping houses greatly depends on how well you did the inspection. The importance of a thorough property inspection before a buy could not be stressed enough if you do not want to end with a bloated cost of repairs and an unfinished, unmarketable house. If you are a newbie, then you must hire someone or ask a mentor to help you inspect the house from the roof down to the gutter.
The next thing you must consider is the cost of rehabilitation in your area. Remember that every house you buy has different needs for rehabilitation so that you cannot estimate your cost base on the latest project you or your friend did. To cut your time on cost estimation and to avoid being beaten up by another buyer, it is best if you prepare a package price before you inspect a property.
If you want your house to sell within the shortest time possible after rehabilitation, then you also need to consider location before you sign the deeds. During these times when for sale houses are plenty, the location of your property might be the only thing that matters. When everything else is the same, that is to say when prices are all low and houses for sale are plenty, the remaining advantage you can employ is the good location of your property.
When you flip houses, it's a plus if your credit is not problematic. You don't know when you might need some immediate cash and your excellent credit should allow you to borrow money from creditors within short notice. Even though you have some money in your bank account, it pays to leave it alone and use borrowed money to fund emergency cases during rehabilitation.
Although you can really make descent money out of flipping properties, but all business endeavors have some risks involved. These risks can only be mitigated if you prepare for them. Educate yourself as much as you can before you flip houses for the first time and it will not be long for you to see some serious rewards for your efforts.
The principle behind property flipping involves buying houses well below its true market value. These properties have slight to moderate damage on them which needs to be rehabilitated and brought back to its best condition before putting it back for sale on the market again. The property flipper makes money from the difference of the amount he sold the property and the amount he bought it.
Sound simple enough? Well, there are things that you need to consider first before you flip houses to ensure that you end up making profit instead of incurring loses. After all, it always pays to know the battle you are going into before you lift a finger to fight.
The first thing you need to know is that your success in flipping houses greatly depends on how well you did the inspection. The importance of a thorough property inspection before a buy could not be stressed enough if you do not want to end with a bloated cost of repairs and an unfinished, unmarketable house. If you are a newbie, then you must hire someone or ask a mentor to help you inspect the house from the roof down to the gutter.
The next thing you must consider is the cost of rehabilitation in your area. Remember that every house you buy has different needs for rehabilitation so that you cannot estimate your cost base on the latest project you or your friend did. To cut your time on cost estimation and to avoid being beaten up by another buyer, it is best if you prepare a package price before you inspect a property.
If you want your house to sell within the shortest time possible after rehabilitation, then you also need to consider location before you sign the deeds. During these times when for sale houses are plenty, the location of your property might be the only thing that matters. When everything else is the same, that is to say when prices are all low and houses for sale are plenty, the remaining advantage you can employ is the good location of your property.
When you flip houses, it's a plus if your credit is not problematic. You don't know when you might need some immediate cash and your excellent credit should allow you to borrow money from creditors within short notice. Even though you have some money in your bank account, it pays to leave it alone and use borrowed money to fund emergency cases during rehabilitation.
Although you can really make descent money out of flipping properties, but all business endeavors have some risks involved. These risks can only be mitigated if you prepare for them. Educate yourself as much as you can before you flip houses for the first time and it will not be long for you to see some serious rewards for your efforts.
About the Author:
Author Jack Cockrel is a real estate investor based in Atlanta, Georgia. He has made more than 750 real estate transactions since 1996. For Real Estate Investing Tips get his free course Real Estate Investing Free Course.
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