I am interested in getting into the whole "house flipping" thing. I have always had alot of interest in real estate but have to real experience. Me and my husband have taken on alot of projects in OUR homes and I really enjoy the work and the satisfaction I get from making the improvements. Thats why I feel it would be a good thing to take on. I just have no clue where to start, or how to know if a property will be profitable, please help!
2007-03-01 07:48:06 · 7 answers · asked by fasn8ya 1 in Business & Finance ➔ Renting & Real Estate
A few comments:
1. If you plan on doing a lot of the repairs, and you can afford the taxes and insurance while you do those repairs, then you basically just need to find a good deal and get out there and get after it. What's a good deal? You should look to spend no more than 70% of the after repaired value of the property's likely selling price. Take the market selling price of the comparable properties in the neighborhood, multiply that by .7, and subtract your estimated cost to get all the work done. So that means it will have to be a pretty good beater. Keep in mind you will likley pay higher interest rates on any loan you get, and some will not even lend if the property's condition is too poor.
2. To those detractors out there, that there is no money to be made in flipping in a buyer's market, these are the same people who said you couldn't make money in a seller's market either because it was too easy for people to sell properties at close to their market values for you to be able to strike a deal. The real estate market is just like the stock market, except not NEARLY as volitile...you can make money in a up or down market equally as well if you know what you are doing and buy at the right price.
3. Was this explanation way over your head? If it was, you are not ready to flip. Go to www.creonline.com and learn the techniques for creative real estate investing...go to the message boards, they have tons of folks who flip full time likel me who can help you and answer your questions without all the neagtivism of all the Chicken Little's in here.....
2007-03-04 06:31:52 · answer #1 · answered by jsullymaan 3 · 1⤊ 0⤋
The number one thing you need is an inspection. Get the full inspection for about $250-300. Make sure the roof, foundation and plumbing are included in that inspection. The inspection can be done before the house is in escrow so you can back out if the inspector finds too many problems.
Also, check with the city and find out how much the city permits and inspectors (separate from the one mentioned above) are and what you will need. This is also a very important step. It will cost a lot of money if you get shut down during construction.
Get a good contractor. Even interview them. Walk threw the house with them. Ask for references and actually check those references. Try to find one that does not subcontract out the work. Hire one that has regular employees, they are more reliable.
When you are actually remodeling the home, remodel for the neighborhood. Don't fill the home with overpriced options just because they are nice. You are not living there. If the neighborhood is just average don't put granite, stainless steel appliances, etc... Price the home for the neighborhood not for all the upgrades you put in. The price of the home plus your budget for remolding should be priced right for the neighborhood. If you are flipping a large home than yes you must put the upgrades in it.
Remember the kitchen and master bath usually sell a home.
Don't forget the Tylenol, you will have a headache for the duration of the flip. =) But hopefully your savings account will love you when it's all done.
Goodluck!
2007-03-01 16:12:34 · answer #2 · answered by Anna L 2 · 0⤊ 0⤋
DO NOT! Not only has the housing market gone soft with inventory averaging 12 months before sale, but the Federal Reserve will most likely be raising interest rates in respond to concern that the economy is heading towards a recession.
Speculative real estate is not for the average who has no excess cash to cover downward trend in the industry. Even large developers are reporting historic losses due to a soft market. So, please...don't....you are better of off buying some nice govt. bonds or diversifying with a mutual fund. Even a high interest bearing account such as with ING is a better place to park your money for now compared to investment real estate.
2007-03-01 16:50:46 · answer #3 · answered by boston857 5 · 0⤊ 0⤋
Well you picked a bad time to get into this business.....I flip full time and the market is very soft right now....I have cash, so I am in a position to buy and hold, but most people get killed on carrying costs....That means, you buy a home and have to sit on it for months, that will kill your bottom line with mortgage payments.....My suggestion is, you buy a home, live in it while you do repairs and sell it with in two years, to avoid capital gains....Take the proceeds and buy a second, you keep doing this process until you have enough "cash" to buy at foreclosure auctions.....Best of luck....
2007-03-01 18:41:35 · answer #4 · answered by Anonymous · 0⤊ 0⤋
GET A REAL ESTATE LICENSE AND LEARN THE BUSINESS.
HOUSE FLIPPING IS NOT A "THING" AS YOU REFER TO IT.
IT IS A SERIOUS BUSINESS VENTURE THAT MOST PEOPLE FAIL AT BECAUSE OF A "FLIP" ATTITUDE.
TO START WITH ANY HOME THAT YOU PURCHASE MUST BE AT LEAST 30% BELOW CURRENT VALUE AND IN FAIRLY GOOD SHAPE.
2007-03-01 15:57:35 · answer #5 · answered by charlotte q 2 · 0⤊ 0⤋
Don't start! If you admit you know nothing about it, don't get into it. You could end up losing your current home and everything you own. Those shows on TV are very misleading. Also, real estate prices are no longer rising the way they were a year ago. Please, be very careful------
2007-03-01 15:54:47 · answer #6 · answered by connor g 7 · 0⤊ 0⤋
Buy a house is the first step.
Seriously, see if you can acquire undervalued property, fix it up (usually it is cheap because it has problems), and sell it for more than you put into it.
2007-03-01 15:57:55 · answer #7 · answered by kingstubborn 6 · 0⤊ 0⤋