23
Tips for Fixing and Flipping Houses
Posted under cleaning house tips
One way of making money by investing in real estate is through fixing and flipping houses. A fast flip is how many real estate investors start with, in order to make money quickly. After flipping a few houses, they try other real estate investing strategies, such as land lording or investing in properties like apartments. If you are considering employing this strategy for investing in real estate, then you need to know what kind of property to purchase.
You can make millions by converting ugly looking houses into attractive ones, but if you are inexperienced, there are chances you will lose money, purchasing houses that do not reap profits.
Listed below are some of the important factors you need to considered if you are planning on venturing into the real estate business by fixing and flipping houses:
. If you are planning to fix a house, make sure that you have enough credit or cash available to complete the project. You can even use rehab financing that will cover the costs of purchasing and remodeling.
. It is important for any investor to have an idea of how much a house will sell for once its fixed. Do some research and find out details about your chosen real estate market. Make a spreadsheet of several houses in order to determine which house will be profitable for you.
. Get a basic idea of how much the upgrades and repairs of the house will cost you. Learn how to estimate the material and labor costs. You can go to the local home improvement store and get the price list for the materials you will need.
. You need to know how to do the calculations. Compare the purchase price, labor, materials and the expected sales price and add in your closing costs, holding costs and the unexpected costs fund. Determine the house that offers the best profit and make several offers.
. Try to get the best financing for your situation. Decide whether you will use your own money, try rehab financing, or apply for an investment property loan. You can even talk to a loan officer or your bank for more options.
. Decide on how you want to go about finishing the work, and whom you would like to hire to do the repairing. You may want to make changes according to what your future buyers want, so learn which patterns, colors and features will bring the most profits, without spending extra money.
. Prepare an action plan so that you do not forget things, and start the repairs immediately. If you let the house sit after the closing costs, it will cost money everyday in terms of the mortgage and utilities.
. Make sure that you know how to sell a house to a qualified buyer.
If you are starting out in the real estate fixer enterprise then you may want to look for a house that needs only cosmetic work. Try to look for houses that only need painting, cleaning up and new flooring. Do not ignore houses that smell or look bad. Always remember that although these houses may not seem attractive, an intelligent investor can turn them into gold mines. You just need use your imagination and visualize the finished product, and the profit that it may bring. Fixing and flipping of houses can be more than a way to create wealth. You can also help to improve the neighborhood, and above all turning an ugly house into a dream house for a buyer can be great fun.
Kris Koonar
http://www.articlesbase.com/non-fiction-articles/tips-for-fixing-and-flipping-houses-103393.html
Guide to Cleaning BBQ Gas Grills Easily!
Flipping HOUSES?? Good Investment?
For those who don’t know, the term "Flipping Houses" is when you purchase a house, fix it up and sell it for more money to make a significant amount of profit. Does anyone know if this is a good road to take? A high risk? A low risk? Have you had experience? Tips and Knowledge? What can you tell me about it? I would like to know because I’m really thinking about doing this.
Very high risk. Lot’s of hidden expenses. Including taxes for a home you have not lived in for at least 2 years.
You’ll learn after your first ‘flip’.
References :
If you can do all of the work yourself, can evaluate the house and truly know what needs to be done, then it can be very rewarding, as long as you’re in a good housing market (not like Michigan, where I am). If you have to pay someone to do all of the work, your sunk costs will be difficult to recover. If the work is mostly cosmetic, painting, landscaping, cleaning - easy to go, if you’ve got to rip out electrical or plumbing, that can get pricey quick.
References :
It really depends on your local real estate market, and how cheap you are able to get the house, and how much work it will take to get it ready. If the market favors the seller, and the house was purchased for below market value, and the repairs are pretty cheap (painting the ugly walls, etc), then it’s a good deal. It can be pretty risky, b/c if no one wants your house, then you are stuck with it. Make sure you buy properties that are rentable, if you wind up stuck with the property, at least you can rent it. Make sure that the potential property is evaluated for expensive problems, before you buy it.
Hope this helps!
References :
Well, in Buffalo, out of town flippers have been fined and jailed because, let’s face it, most do not make the repairs they need to. I would stay away from this investment idea as you just can’t be sure how hard the local housing authority will be.
References :
It’s risky. You have to know your market, be able to plan and execute the remodel on time and on budget, pick the right house in the right area, and then know how to get the word out that this house you’ve worked so hard on is up for sale. You also need to know when people are buying and what they’re looking for in your asking price range, because if you miscalculate, you’ll get screwed. Plus, you have to know how to deal with contractors, what permits will be needed and how to get them, and what the local laws and regulations are.
References :
Good investment, high risk now. The bubble is losing air. It use to be a sellers market now it is turning to a buyers market.
Check your area and see how long the houses have been listed for sale.
In a sellers market they go for over the asking price and can be sold before the for sale sign goes up. This is what happened to numerous neighbors of mine in the last 24 months.
In overvalued areas FL & CA houses can stay on the market for 14+ months and the offers are below the asking price. Do your homework first.
References :
real estate is always a good investment. if you are planning on flipping houses make sure you have the ability to pay the mortgage on it until it sells. also remember that you may need to fix it up a bit. If I were you I would get started by making sure you understand real estate, loans, taxes, and titles. find your self a good realtor that you can trust. find a mortgage broker you can trust. remember that none of these people are gonna work for free. so dont try to nickle and dime them to death. In some states you can get around having to use a realtor….but I prefer to use one so that I can use my free time making money instead of trying to sell a house.
Pay attention to the market that you are buying in. are homes selling fast? are they going for the kind of money you will need? remember that a buyer if financing will only be able to get a loan for a certain percentage of the estimated value. what have the houses been selling for in that neighborhood? thats a good way to get an idea for what you can sell for, as long as the house is in similar condition. Its a good idea with little risk, but it is expensive if you dont play your cards right. oh yeah, dont go out and waist all your profits, invest it into your next property.
Honestly, you might consider keeping some of the homes as rentals (with the market doing what it is doing now), if you can earn a positive income on them. I sold a house in 2002, made about 200k. 3 years later and i would have made about 600k on the same house. Know your market area. hope that helps.
References :
I have been investing in real estate for over 20 years. I agree that you need to understand your target market before jumping into flipping. There are other less risky alternatives then risking your money in flipping projects.
Flipping is ideal if you have the talent, time, money and the wherewithall to conquer the obstacles. Everything costs more than you budget, depending on the condition of the property you need to plan and anticipate the unknown defects that are going to pop up. Does every property present problems? Not exactly but the ability to avoid problem properties comes with experience.
If you are lacking any of the above then you need to compensate with the other. If you have the money, then you can buy the talent, time and experience. If you don’t have the money, then you have to have the time and talent to deal with the project.
If you insist on flipping, I would suggest the government auctions through HUD, VA and the FHA for example. By the time they get to auction they have been inspected and you generally get a good picture of the scope of work that needs to be done. I have yet to come across a HUD property that I have bought that had any surprises with it and thus you jump in with your eyes wide open.
You will definitely want to work with a good real estate agent who can get a quick property value for the area you are working in. I am not familiar with the California market but you want to stay in the middle as far as property values go and look for the worse house in the best neighborhoods that is going to appeal to the largest consumer market in the area when completed. For example, in Louisiana there are not that many million dollar homes. The average home is around $200,000 to $250,000. You would want to concentrate in that area or just below it since there are going to be more buyers in those markets. The middle ground will also present the largest profit margin. Million dollar homes require top dollar renovations. In a bottom market you may not recoup your investment. The middle market you can get by with a middle dollar renovation and recoup 100-150% or more of the cost. You have to factor in the cost of holding the property while it is being renovated otherwise you will find yourself without any equity if you are not careful. Figure mortgage payments, taxes, insurance, etc. etc.
Flipping can be a great business. I suggest you watch the many cable shows that deal with those types of deals. If you haven’t already, look for "Flip this house" on A & E or "Property Ladder" on TLC Discovery. Property ladder is more amateurs doing the flipping. FTH profiles professionals.
References :
Sam B seems to know what he’s talking about and so does the GIRLWHOKNOWS. If you don’t have any connections to vendors who can do inexpensive and quick work and can’t do it yourself it probably will be an uphill battle. You need to know where to buy wholesale for materials, Home Depot isn’t going to get your in the red. I’d suggest possibly finding a buyer before a property and there by eliminating a large amount of the risk. I do this for a living so it’s obviously possible but I see A LOT and I do mean A LOT of people that have no clue what they are doing and think this is a get rick quick with little work scenario and that is very far from the truth. You have to know your market, know a good deal about construction & rehab, know how not to get taken by contractors. . . it’s a lot and it’s not for the faint at heart. If you’re in the midwest I’d be glad to help you.
References :
I flip homes, but without rehabing them first. They way you’re doing it will be more risky than just flipping because of holding cost. If your area is in a slump, look into flipping short sales or pre-foreclosures.
Regards
References :
Satar Naghshineh
satarnag@amirifinancial.com
http://www.amirifinancial.com
California Licensed Real Estate Broker and Investor
Add A Comment