Flipping Houses: A Strategy For The Bold Investor

Flipping houses is a marketing strategy where an investor in real estate buys and holds properties for a short time, and sells them at a profit. This works when the real estate market is on the rise. Many investors who flip houses, sell them without renovating them, or by indulging in cosmetic changes only, whereas others spend money to convert them by upgrading and carrying out heavy maintenance and repairs, before putting them back on the market. 

Flipping houses is not as easy as it may sound, as you may have to hold on to the property in case of adverse trends in the real estate market. You need to have some contingency planned if you are unable to off load your property as fast as you thought you would. If you are a new investor in real estate, flipping houses is not for you, as you might lose money due to your inexperience in picking the right houses for flipping. To make money by flipping, you must have the ability to indulge in the strategies of bargain buying, combined with upgrading the properties.

The Fixing And Flipping Strategies
The success of the strategy of flipping depends on your ability to fix houses before you re-sell them. For that to happen, you need to know which houses are ideal for fixing. You also need to have the ability to know which run down house can be fixed, and sold, and which run down house needs to be avoided. 

You must look at the many houses there are on sale to identify a bargain house. To know about the real estate market, keep track of the sales of the houses in your area, and meet with real estate agents to learn about the terms of the sales, etc. This will enable you to know how the property is marketed by sellers ¨C did they pay the closing costs, thereby raising the price of the property, or did they foot the closing costs and at the same time lower their asking price?

If certain homes have sold faster, find out what features, or financing options, enabled such rapid sales. Explore all the model homes, to learn what distinctive features sell. You may not be buying model homes, but when you start to fix your run down homes, you will know which features are hot selling features that will attract buyers.

You can start your flipping houses strategy by looking for homes that require cosmetic changes, at first - houses that need cleaning up, painting, and new flooring, to begin with. Look for run down houses in decent neighborhoods. When you first see such houses, you should have the imagination to visualize what they will look like after the minor renovations. 

Make offers on houses that buyers would normally shun, because they look horrible and stinky. These are the houses that are going to make money for you. They are your potential goldmines. When looking for houses to fix, houses with peeling paint, and holes in the wall, should light up your eyes. The more stains you find on the carpeting, and more the trash in the yard, better for you to bargain the price down. These are the houses the buyers are going to notice once you have fixed them up.

When new to the flipping business, care needs to be taken that you do not invest in properties that will require major structural repairs. You may be out of your depth, and may lose heavily in the bargain. Identify your limitations and move ahead with caution. Many investors rehabilitate houses that have required replacing walls, and complete plumbing, in addition to structural beams, along with flooring, etc. These are those investors who have had years of experience and skills in flipping houses, and have the wherewithal to do so. 

If you see a house with potential to fix and turn around, have it checked for defects. Let the professionals look for structural damage, the cracks in the walls, plumbing problems, if any, and ask for estimates for repairs. This will let you decide whether it is worth your while investing in such a property. Of course, the bigger the expenses in fixing the property, the lower will be your profit, or there may be no profit to look at. 

No doubt, rundown houses are where you, as an investor in flipping, are going to make your money. Nevertheless, you should have the ability to distinguish between the houses that can be turned for profit, and those that should be avoided at all costs.

 

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