Savvy real estate investors have been making large sums of monies purchasing homes and turning them around for sale in short order. Flipping a home, as it is called, is successfully done in all regions of the country. If you know what you are doing, you can make a heady profit on the sale of a home that you recently acquired and fixed up. Let’s take a look at this profitable trend and how you can maximize the home flipping opportunities in your area.
Popularized by the hit A&E series, Flip This House, home flipping has been one way for investors to amass a huge fortune within a short period of time. Each show details the work that home flippers must do in order to flip a home; by the end of the show you know what the owner’s asking price will be based upon a realtor’s expert assessment of the renovated property.
Although much is shared on the show about home flipping the reality of the process is much more detailed than what can be revealed during one short episode. Here are some things for you to keep in mind if you plan on flipping homes:
What is the market value of the home you want to purchase? Have you taken into consideration the repairs to be made when tendering your offer? Knowing the costs of repairs in advance can help you plan accordingly and maximize your profit.
Is the neighborhood promising? In other words, if you were to sell a renovated home in that neighborhood would you likely find a buyer quickly? Consider the overall market too. If you are buying a home during a market downturn, you may find it difficult to recoup your initial investment and possibly suffer a loss on the transaction.
Once you close on the home, be prepared to begin renovations immediately. Get all permits quickly and if you are using a contractor make certain that you are both on the same page when it comes to starting and finishing the project on time. Time is of the essence because the longer you hold onto the home, the more money you will have to pay for a mortgage, real estates taxes, utility bills, etc. These monies will affect your profitability and must be taken into consideration when flipping homes.
When renovations are complete, seek a real estate professional who is skilled in coming up with a market value for newly renovated property. Hopefully, the market price that you are given will more than cover the costs and time for repairs as well as the taxes, mortgage fees, and utility bills incurred during the interim. Finally, take into consideration closing costs, attorney fees, and all other expenses related to selling the home.
In the end, every dollar over and beyond your expenditures will be the profit you made on home flipping. Keep detailed records to determine your actual costs and you will soon learn if flipping homes is right for you.
Steve Arnold runs a Real Estate Investment Company called Triangle Home Buyers . View other articles at Triangle Home Buyer's Real Estate Articles page.