Buying and Flipping Real Estate
Flipping a house means buying a property cheap, at below market price, increasing its resale value, and then selling it fast to obtain profit. Flipping might not seem like a profitable venture given the current financial crisis and difficult economic condition, but it still has the potential to earn buyers a great deal provided they go about it correctly.
To buy and flip houses, you need to begin by familiarizing yourself with the entire process of buying a home – know how to locate the properties that can be flipped, and understand how to negotiate prices and make an offer. You will also need to be physically fit and willing to put in a great deal of work – flipping houses requires a great deal of renovation, repairs, and DIY work. In addition, mental toughness is also necessary – flipping houses is risky (you will be investing a huge amount of money in something that might or might not pay off in the future), and you need to be able to withstand the pressure and the stress that comes with the risks. Quickness is also a must – if you get involved in flipping, keep in mind that this is the business of buying and selling properties fast. Delays only increase the risk, so you need to be realistic, and sell at a small profit if you get it, rather than sitting around trying to maximize your profit. In short, don’t get greedy.
When looking to buy and flip a property, study the real estate market carefully – is it at a low cycle, with home prices falling, and owners trying to liquidate homes? If so, you might want to hold off the flipping plan until the market sees a drastic turnaround and more people begin to buy as opposed to looking to sell. It is also best if you avoid incurring any debts – only get involved in buying and flipping real estate if you can buy for cash, as this will save you money and minimize the risk.
Once you start looking for a property to buy and flip, keep in mind that your goal should be to buy cheaply, and still sell for under market prices, so you can sell fast. Look for properties that offer you an edge, and that can be renovated as easily and cheaply as possible. Do small repairs and touch-ups – larger repairs, like renovating kitchens, will lead you to invest more money in the house and thus increase the risk. Look for properties in distressed areas, where foreclosures are more frequent, as you will get better deals this way.
After you purchase a property, it is time to move fast. Draw up a timeline delineating how long you will give yourself to get the house touched up and sold for profit. Quickly begin on the larger, more important fixes like rewiring and replacing broken fixtures, and then move on to smaller jobs like repainting, cleaning, etc. Pay attention to fixing both the exterior and interior. Once this is done, you can put the property up for sale, conduct viewings to show the house off in the best light possible, and eventually sell the house for a price that is significantly higher than what you paid for it to begin with.
