what are the risks in flipping houses?
2007-02-22 10:10:36 · 8 answers · asked by Steve 1 in Business & Finance ➔ Renting & Real Estate
The people inside the house during the flip are in grave danger of loss of limbs or life. It is definitely safer to flip than be flipped.
2007-02-22 10:13:25 · answer #1 · answered by O'Shea 5 · 0⤊ 1⤋
Landlord is much safer. Flipping houses can burn you. When you are a landlord you can use the legal system to get rid of bad tenants, in flipping a house, you have nothing if the house doesn't sell for the price that you need. Especially now with the housing market the way that it is. You may not get your investment back. And you would have to pay the mortgage. This way- let someone else pay down the mortgage for you. Later on you can sell, or use some of the equity to buy another one. If the market changes again you can always re-evaluate. Good Luck!
2007-02-22 10:15:38 · answer #2 · answered by Shawn 4 · 0⤊ 0⤋
I think it depends on what your goals are. There definitely risks, but the rewards can be worth it. Do your research first, though.
One of my favorite books for rehabs/flips is Kevin Myers' - Buy It, Fix It, Sell It, Profit!
Some people like being landlords and the money can be good...and some people don't want the headaches of dealing with tenants. It's hard to know what you'll prefer if you've never tried either.
Checkout the site below to learn more about real estate investing.
Good luck.
2007-02-22 15:04:51 · answer #3 · answered by S C 3 · 0⤊ 0⤋
They both have their pros and cons. I work with many investors who do both. If you are trying to flip houses then you must purchase them below market via foreclosures, estate sales, REO's and short sales. Typically, they are purchased around 30%-40% below market. While the boom was happening you could purchase properties at market and sell it for 20-30% higher within 6-9 months with minimal renovations. Today's market is a different story where if you purchase at market value you are lucky if you can sell it 5% more than you did a year ago. Your best bet is to purchase properties way below market value. If you don't you are risking breaking even or even losing money when you are selling. Being a landlord has risks as well. If you have poor tenant selection you will be wasting time and money trying to evict them don't forget about lawyer fees, mortgage payments as well as renovations after the tenant leaves. If you are looking to become a landlord pick the right tenants. If I had my choice I would chose to purchase high end properties and renovate them. The high end areas are not affected as much as your average neighborhood.
2007-02-22 10:34:00 · answer #4 · answered by tianaramal 4 · 0⤊ 0⤋
right now is suppose to be a buyers market. The problem is that no one is buying. There are more house's on the market than people to buy. We are being houned by sellers. Desperate lowering price's. If you can't sell the house fast then I would say no. Go with the landlord thing.
2007-02-22 10:16:17 · answer #5 · answered by Shelly t 6 · 0⤊ 0⤋
haha no flipping houses is not safe. Think about it if you buy a house to flip you may end up getting stuck with a 200k house. Does that sound safe?
2007-02-22 10:12:57 · answer #6 · answered by Sentient6 4 · 0⤊ 0⤋
Yes and no. Right now home prices are way down so if you can buy a property pretty cheap and hang on to it rent it out etc...may be a better idea than flipping. Home prices are bound to go up again and then you can sell.
2016-05-24 00:07:01 · answer #7 · answered by Anonymous · 0⤊ 0⤋
I'd prefer to be a landlord for the long-term return on my investment.
2007-02-22 10:12:53 · answer #8 · answered by Anonymous · 0⤊ 0⤋