Like any good investment, house flipping requires a keen eye. Even though it might seem easy on TV, buying and selling a home can be as risky as it is lucrative. The best part about this business is that almost anybody who has the stomach and cash for it can do it. But you need to do some actual research and learn the market if you want to make money flipping houses.
What is house flipping?
This the process of buying a house at a cheaper price, renovating it and then selling it down the line at a profit. As it stands today, there are about 2 million foreclosed homes for sale in America. Another 7.5 homeowners are either in the process of foreclosure or behind on their payments and most likely to fall into this category.
Technically speaking, these are all houses that a discerning businessman or woman could flip. The process involves your buying a house, usually at an auction, taking some time and money to fix it up properly and then putting it back on the market to make a profit.
Is it possible to make a lot of money flipping houses? Yes, it is very possible. But it is also very possible to lose a great deal of money as well – we call this a flop! The trick is to buy on the cheap, fix it up at a reasonable rate and to sell it off as fast as possible. A couple of months should be ideal to complete this entire process. The more you hold on to a house, the more money you will have to sink into it in terms of utility bills, property taxes, mortgages and so on. Before you invest in any property, it is very important to find a qualified agent such as the top real estate consultant in your area that knows a lot about the area you are flipping the house in if you aren’t an expert yourself.
What makes a house prime for flipping?
The principles that should apply here are the same principles that you should apply when trying to find any good real estate investment:
– Condition of the house
– Good school district
– Making the right fixes
– Selling price
What does it take to venture into house flipping?
– Great credit to make it easier to get money from lenders who have recently tightened their requirements
– You need cash at hand for either the down payment or to avoid PMI (private mortgage insurance)
– A good command of the real estate market
– The stomach for it
As with almost every other business, you stand to make a great deal of money flipping houses or you could completely flop if you aren’t careful. But it needs dedication, patience, a keen eye for great real estate investments and a great realtor.