How to get started flipping houses?

Question

WHAT GUIDELINES DO I NEED TO FLIP A HOUSE

Answer 1

The market in most places will not currently support flipping. No matter how good a price you get, as soon as you go to sell, you become one of the forty sellers competing for each buyer right now.

Now people who buy for longer term investments will do wonderfully well, due to the power buyers have right now. But flippers are wasting their time (and money, if they buy) in a buyer's market like this.

If you're determined to do it, go out and get your real estate license and do some serious studying for when the market is right. It won't be more than a couple of years.

Answer 2

Well, there is no better time to buy than now. If you have the credit and the money, snatch up as many properties as you can. This is indeed a buyers market. With that being said here is your caviat: IT IS A BUYERS MARKET! That menas, you should not flip your properties immediately, because you will not make a profit. I would suggest, purchasing properties that have little to no defects in them, you know, properties that you can slap a coat of paint on and then stick a tenant in. You want to rent them out immediately and make a profit on them so that you can make a profit while riding out this market. Also, when the market turns, it is going to be FLOODED with houses and your will not differentiate, so you will have to ride that out too. But int hat time, you will be preparing the home for flip; painting, upgrading appliances, adding on porches, etc. So when the market settles, and the flood will settle faster, especially with FHA about to bring out their NEW FHA loan, which will be structured for a higher loan amount (currently at 213,750 maximum; they want to be at the 417,350, with is our high for a conforming loan. Probably won't get that high but will reach the 300's.) first time home buyers and such will be purchasing homes if not quickly, they will begin doing it steadily. So the thing you need is credit, money and PATIENCE. Also, you should try to buy in the midwest; proerty value has been maintained in the midwest and portions of the South. Also, I would buy smart; Try to find a street where there are several bungalows/ houses/ apartments/ two family flats on the street and see if you can't buy the lot of them. By doing this, you can dominate that area, and when it comes time to sell, you will basically be the one setting the price range on that street; in essence, your houses will sell according to what YOU sold your last one for. Get it? Good, now go buy some homes! OO! Almost forgot, try holding your property for two years if you want to avoid Capital Gain which can be from about 15 to 18 percent!

Answer 3

buy low
Sell high.

it's been a great biz for the last 8 years in the US, but many people believe that we've reached the top of the housing market and it will be flat or declining in the near future- so now might not be the best time to get into it.

You might want to start with taking a real estate course and getting a realator's license. At least you could save some of the flipping costs by selling the house yourself. And- in the process you'd learn about the industry and it's laws.

Answer 4

You are going to need lots of money, excellent credit and skills in negotiation, construction, design, etc. Many people are doing this so you have to hustle to even get a fixer worth investing in. Know the area you are investing in a few blocks can make a difference in the price of a property. If you plan on hiring a general contractor or subs, make sure you are supervising the work, the budget and timeline.

Answer 5

In all honesty, find one and then keep it as a rental. You become a landlord with steady income. Get good security deposits, there are books out there with advice and lease forms, figure out what your income will be and the property tax and insurance first. Will you make enough of a profit every month to save up for unexpected problems? Read up on all your local and state laws.
And the biggie...SCREEN YOUR TENANTS.

You can always raise the rent every year.

Answer 6

Just buy someting you think is a good deal and can be sold at a profit after some fixing up. Finding distressed sales conditions make the easiest deals and big profits. You might even want to advertise for "I buy homes" locally to find foreclosure rescue situations or people who just want to move fast like I did once.

Answer 7

http://biz.yahoo.com/brn/060909/19463.html

http://money.cnn.com/2006/09/08/real_estate/caught_in_the_bubble/index.htm?postversion=2006090814
http://money.cnn.com/2006/09/05/real_estate/Ofheo_home_prices/index.htm?postversion=2006090514

How to value a property during market downturn?

Housing market continues to slump. Now we can calculate true value of a property easily. As price decline, we don't need to guess and factor in the potential price appreciation while calculating home value. Without the guesswork, figures are more accurate.

Let's use following example:

Today, a typical 15 years old, two bedrooms condo/townhouse is priced around $500,000 and $550,000 in Sunnyvale, California. Rent for similar condo/townhouse is $2000/month.

If you are a home owner, $2,000/month in rent means $20,000 a year in profit ($24,000 per year in rent, minus $4,000 maintenance costs). A $20,000 income is equilevant of owning $400,000 bonds or CDs, because current yield of 30 Years U.S. treasuries are 5% (5% of $400,000 is $20,000). Bank CDs have similiar yields.

In our example, the two bedrooms condo/townhouse is 20% to 25% overpriced. They should be priced at $400,000.

It is interesting to note that if we redo the calculation from buyer's perspective instead of seller's perspective, the figures are even more shocking.

Mortgage payment consists of two parts: mortgage interests and mortgage principal. The interests portion is similar to rent. If you pay interest, it disappears and doesn't add equity to the property. To fully simulate characteristics of renting, we assume buyer will apply for a zero down, interest-only loan.

It turns out that rent of $2000/month is equivelant to mortgage payment of a $340,000 loan at 7.0% APR. And comparing $340,000 loan to $500,000 or $550,000 price tag, from buyer's view, the two bedrooms condo/townhouse is 30% to 35% overpriced.

One may ask, why is there a discrepancy between two perspectives of the buyer and owner?

The discrepancy is a result of 2% differences in interest rate that buyer borrow comparing to yields of bonds and CDs that owners would get. We understand that buyer would always pay more. That is the premium of buying to own. However, looking from home owner's perspective, current housing market is probably 20% to 25% overpriced. We recommand investors to wait for a better entry point.

Answer 8

Go to www.realtor.com ~From there, type in the zip code of the area you are looking to purchase in. You can browse properties and get a good idea of the market in that area. The key is finding a good an honest contractor who you can communicate well with. Good luck~

Answer 9

Dont Do it!!! .. House Are Heavy and you will probably Hurt your Back!

Do what I do Instead .. Flip Cars ....Just Make sure you wear your seatbelt :-)

Answer 10

Start looking into tax records, legal classifieds and real estate auctions. Find something you can afford, fix up and sell quickly.