Hi- I'm 22, about to graduate college. I'm interested in flipping houses. PERFECT CREDIT. Live in Reno... Any advice on getting started would be appreciated. Thanks!
2007-02-12 08:07:18 · 6 answers · asked by legaleye2005 1 in Business & Finance ➔ Renting & Real Estate
The first two answers have good replies.
Find a house that has a lot of equity, and that you can maximize it's potential with limited improvements. Do your own research on how much you can sell a property for when its done, don't forget that realtors make money off of it, so they may tell you that they can sell it for more than they really can. Buy the worst home in the neighborhood, and make it average/above average. Don't buy an average home and try to make it wonderful and expect a great return.
Be prepared to spend more than you think you will on repairs, and on holding costs. Home equity lines of credit work best, as you only pay interest on the money you've taken out, as opposed to getting a huge loan and paying interest on it the whole time.
Make a plan of action and stick to it! If you just go in every day to work on it, but have no idea what you are going to do, you will get overwhelmed very fast.
Here is what I did on my first flip, since I had excellent credit, but no money:
I found a home for sale that had been a rental for many years for sale for 15000. I talked the guy into selling it for 11500 if I paid cash. I found 2 investors, one gave me 6500, the other 5000. I promised them returns of 50%. I paid cash for the property, then had it appraised. The property appraised around 45000 (before I did any work), so I took out a home equity line of credit for 35000. I estimated repairs to be around 17000, and they were closer to 20k.
Do your homework, find out how much work a home needs, and how much materials (and labor if your not doing it yourself) is going to cost. Find out the costs of other items that I didn't think about.. Such as a dumpster, how much the elec company charges to hook up power, ect.
Set a price slightly higher than you hope to get, so when people make offers, they come in right where you want.
Good luck
2007-02-12 08:49:51 · answer #1 · answered by ? 5 · 2⤊ 0⤋
How deep is your pocket book? How much do you know about houses and construction? How many trades people do you know? Do you have a "BIG PICTURE" plan or are you step by step decider? Have you been pre-approved for a morgage? How much can you put down? etc these are all questions that you need to ask yourself. First and foremost, start off slow. There are many house flippers in the game today and most go bankrupt in the first 6 months. They have no idea or concept involved.
Step #1) Start reading and learning about houses and market trends
Step#2) Get in the know and start talking to experts
Step#3) Start budgeting and have a reserve fund. Chances are you'll need it.
Step# 4) It's a house not your home. We all want the top of the line gear and gadgets in our homes. So be it. Since you should start small, don't buy a Gallery Editions washer, dryer and stove with Stainless steal Fridge, over and microwave for a house that is 1500-2000 sq feet. Start small means think small. Whan you are buying and flipping 1.5 million dollar homes then you can start to think about 62" Plasma and all that other nice stuff.
2007-02-12 08:17:34 · answer #2 · answered by GoodWillHunt 3 · 3⤊ 0⤋
It can be risky and you need money to start. Basically, you buy a house that is usually in need of work and selling for under market value. You fix it up and HOPE to resell for more then what you spent so you make a profit. In many parts of the country right now, the market stinks as far as selling (Buyers market). You may want to consider buying now, doing major improvements while living in the house and sell it when the market turns around.
Flipping houses does not mean you just go get loan after loan to buy and resell though...you need alot of cash upfront.
2007-02-13 04:21:34 · answer #3 · answered by KathyS 7 · 0⤊ 0⤋
You've received some excellent replies already.
If you want to learn more on the subject, there are lots of great books on Amazon.com and flipping courses on the cheap on eBay.
One of the best websites out there regarding real estate investing is www.creonline.com. You can learn a lot at that site - and the info is all free! Good luck.
2007-02-12 12:28:12 · answer #4 · answered by S C 3 · 0⤊ 0⤋
Do make certain you hire an inspector, and walk via with him so he does not forget considerable info. the greater serious case situation is mildew and dry rot at the back of the partitions, and ceiling.
2016-10-02 00:53:26 · answer #5 · answered by hamb 4 · 0⤊ 0⤋
find a home with a great deal of equity
2007-02-12 08:28:47 · answer #6 · answered by klu714 1 · 0⤊ 0⤋