Is there better money in building houses from scratch or flipping houses?

Question

For the average person without very deep pockets...what is your opinion on this? Real experiences/ stories appreciated.

Answer 1

There are still lots of investors flipping properties for a profit.

If you do not have lots of money, then flipping is probably the better way to start.

Even in flipping you have to have funds to flip the properties, unless at first, you become a bird dog and find properties for others to flip and they give you a few thousand dollars for your contract.

I would suggest that you read a few books you can find at your local book store about real estate investing. There are many on foreclosures, distress properties, buying, rehabbing and flipping. You might find a few at your local public library.

Building houses cost a lot of up front money before you even get to start building a house, like city permits, drawings, variances in some instances, making plans of the project, getting city approval and you have not turned over your first shovel of dirt yet, yet all these expenses have to be paid up front.

Therefore I came to the conclusion that starting out flipping is better.

I hope this has been of some use to you, good luck.

FIGHT ON"

Answer 2

Put it this way--- building from scratch or flipping are both very risky. It'd be very easy to go bankrupt doing either, and people ARE going bankrupt every day from it.

I'll link two books for you which are very good on the topic of real estate investment.

The key, and hard part, to flipping is that you can not sell the house for more than market value at the end. People will not pay more for your house than they would pay for the one down the road. Therefore to make money, you have to BUY the house at below market value, leaving yourself enough room to fix it up, pay the mortgage while you own it, and then sell it with some profit left.

Of course, 6-7% of the selling price will be lost to the real estate agents at the end, further cutting into your profit. Those house flipping shows never add that figure in.

In California, when real estate was rising 10-20% a year, you could flip houses without even fixing them up. But in the flat real estate market that most cities are in now, it is a really hard gig to make work. I recently got a foreclosure, which after fixing I could potentially flip and make about $20,000. I'm going to keep it and rent it out, because I'm in this to build assets, not turn a quick buck. But opportunities like this are RARE where you even could turn it for a quick buck. And there are a lot of people way hungrier and more determined than I am to find them first.

Anyhoo, good luck to you.

Answer 3

Flipping houses was big for a while (so was the term, that everyone thought sounded cool), but it has lost a lot of its momentum. Many people got into flipping houses and thought it would be an easy buck. They dound out the harsh reality instead, that it's a lot of hard work, money output, and no guarantees. Many people thought they woudl come away with more than they did, and believed all the studd they saw on HGTV. Real estate is always a good investment, but rehabbing homes (flipping them) is no easy task. You need a good eye for a good investment, and many do not have that kind of expertise or natural ability.

Answer 4

Depends on the market. A house that my friend built for her family 3 years ago ($140, 000 Canadian) she sold 2 days ago for $285 000. Depends on the housing demand and current market.

Answer 5

In my past experience I would say flipping houses, and it takes less up front money.

Answer 6

flipping has lost its steam . People are sick of paying 500,000 dollars for a rambler