I've seen the show "Flip that/this house" and I'm curious to know how to go about it?

Question

Do I go see an agent, or just ride around the city and look for houses particularly fixer-uppers that are for sale or advertise
to buy houses.? At auctions, do you have to pay in full cash?

Answer 1

"House Flipping" can be tricky..You can "Loose your shorts" literally!!....I recently lost 11,000 on a flip due to our market and several (unseen) issues with the house...So be careful and never bet more than you can afford to loose!..

Make sure you (or someone very close to you) knows your market very, very well..Make sure you understand what sells and what doesn't and make sure you can do much of the work yourself or hire it done "professionally" at a reasonable price..Paying for labor can eat you alive!!!

Good Luck...Just remember to think before you just...It can be expensive!..ss

Answer 2

I watched that show for about 5 minutes and wanted to barf!!

What a bunch of crap they are peddaling. Don't believe the stuff they are saying. I've been buying, remodeling and selling for a profit for over 20 years. It is a very difficult thing to do. There are a lot of ways for it to go wrong and you not end up making any money.
To really be able to do this you should get your license. That way you can both find the best deals and not pay full commissions. I've met a few folks that say they are flipping and making money at it. When I ask how much per house are they making, they start to dance around a bit. Many of the recent people who are flipping aren't even making money they just don't know it yet. How can that happen you wonder, don't they know if they have a profit? What most people who are new at it fail to calculate is the tax on the income they are earning. When they roll around to tax time and find they owe thousands, it's a shock.
So by all means follow your dream, I mean I did and I'm very happy that I did.
But you need to be handy with tools, know at least something about how a house is constructed so that you can make most of the repairs yourself. To pay someone to do the work, cuts into your profit and there isn't that much profit if you start cutting into it at every turn.
Take some real estate classes.

Have fun along the way and don't believe most of what you read, or certainly not what's on TV.

Answer 3

You can do any or all of the above -- it's just like you're looking for a house to actually live in. If you plan to buy at auction, you should get pre-approved for a mortgage -- as far as the auction house is concerned, it's as good as cash in hand. The idea is that you buy the house like normal, fix it up and sell it before you have to pay too much mortgage on it, ideally at a significant profit. This is rather risky and speculative, however, so you really need to know what you're getting into ahead of time, or you could lose a lot of money.

What you're looking for is an undervalued house, one that is very solid structurally and only needs cosmetic improvements to make it a really desirable property. Maybe it needs new cabinetry or a better paint job, or a non-weight-bearing interior wall that can really just disappear and make a more open and inviting space.. that sort of thing. Make a list of all the things that would make the house into somebody's home, and make an estimate for how long it would take you to do the work yourself and about how much it'll cost. Then increase your estimate by at least a third for the real cost in time and money. If it still seems reasonable based on how much the property will be worth when you're done, get the house cheap and do the work to flip it, then put it back on the market. You have to have a good idea of several things, however:

1) will the work you put into the house and yard actually improve the marketability of the property?

2) will the profit you make from re-selling the property more than offset your cost in time and expenses? Don't forget all the fees that come with selling a house, like the closing costs (when buying a house, I always try to negotiate for the seller to cover closing costs, which can be on the order of $10,000 to $20,000)

3) do you actually have the wherewithal to cover all these expenses? You need to be able to afford all this ahead of time, because the payoff only comes after you re-sell the property. It's a lot of work, time, blood, sweat and tears to flip a house; the program condenses months of planning, work and headaches into a half hour and makes it look easy, but it's almost a full-time job all by itself. Be very careful, Grasshopper -- the pool is deeper than it appears when you first dive in.

Answer 4

Well, be careful with flipping now. The market is no longer nurturing towards a flipping market. You'll have trouble selling after your fixed it.

A new trend is purchasing a foreclosure, fixing it and holding. Renting it out until the market favors sellers again.

Try this site to find some killer deals and get your wheels turing;

http://www.foreclosure.com

Answer 5

Like Hunter2 said, I want to barf when I see this show.

What really gets me is when at the end of the show they give you a breakdown of the expenses and then show the profit, they are leaving out 2 important numbers....the agent's commission and taxes. It gives a very distorted picture of how much money was really made...