What are the pros and cons of flipping houses?

Question

I am interested in real estate. On that note what are some good sources from wich to learn before starting out in this booming market?

Answer 1

Hi Richard,

I do flipping for a living....

The pro's are, you are providing someone find a nice home to live in and helping to upgrade the neighborhood....You are providing work for contractors and helping the economy....Also, if you buy right, you will make a healthy profit!

The con's are, mainly the holding costs! Many inexperienced flippers pay too much for the home and end up having a hard time selling it, for a profit....This will ultimately kill your profits if you pay too much and can't sell it quickly.....So the key is buying right and selling low to avoid holding costs....If you have any other questions, feel free to email me....Best of luck!

Answer 2

pro : A lot of money could be made if you get a deal on the house, keep it long enough to raise the value and perhaps do some renovations to help.

con : Everytime you sell, you pay about 6% commision to the real estate agent, and 1 to 2 grand to the real estate lawyer. The market is just about to slow down, in some cases, prices have dropped. Not good news for flippers.

I do recomend getting in the market, renting the property for a while, then selling.

Answer 3

Pro: Good money to be made and you get a reptuation in the area if you are good.

Cons: Market is slowing down. Can you afford to take a financial loss without it affecting your personal finances? Can you afford 6 months of payments? A years worth? Do you know the area you are buying in and is the are saturated with houses for sale (and the reason why so many)? Do you know enough professional people to help flip a house - plumbers, electricians, foundation specialists, remodelers, landscapers, realtors, inspectors, etc - who will give you a good deal to be profitable? How much work can you do on your own? Do you know how to manage a project time line and budgets?

Watch Flip this house and see how many regular people struggle to make this a reality. It's not for everyone.

Answer 4

In brand new truly property marketplace, flipping properties isn't an effortless enterprise, peculiarly in the event you wish to finance it and don't have any coins available. Most banks is not going to mortgage cash for funding estate with out a hefty down-cost, then you are going to nonetheless have to have cash for repair-up charges. There are "rough cash" creditors available in the market a good way to finance a house and maintenance, however most of the time best 50% or 60% of after repaired significance, so you are going to must be enormously diligent find a estate a good way to have compatibility this standards. If this would be the first one, the "rough cash" lender will mainly additionally require meantime inspections to be certain paintings is being performed in keeping with agreed phrases, and those inspections aren't low priced both. You have to do your homework, uncover out the legislation to your discipline (believe me, there can be many), find the creditors to your discipline and uncover out what they require, and collect a well crew of advisors (Realtor, Attorney, Title Company, Accountant/CPA). You will even have to study different makes use of of your estate except simply promoting it, corresponding to renting (landlord legislation), hire to possess or hire-choice. Don't suppose the ones TV indicates - there may be so a lot more to it than that. Plus, this marketplace isn't the exceptional in case your best choice is to promote considering properties are simply now not promoting good correct now.

Answer 5

The cons are big price tags and costly mistakes. Of course the pros are nice profits if you are careful. You learn by doing.