because isnt that the idea of flipping a house to buy it under price and then fix it and sell it for more
2007-08-23 08:39:31 · 9 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
If you are going to try and buy a house, fix it up, sell it and make a big profit....then the first step is to buy a good house at a great price.
I don't think that a foreclosure is the best bet for this. But regardless, don't look specifically for a foreclosure- look for a good house (has a lot of "upward" possibility) at a great price.
Some guy may wake up today with a pain in his gut and hate his rent house and is ready to dump it if someone can close on it within 2 weeks.
You need to be ready to take advantage of that and have ready cash or a ready bank that will loan you the money quickly.
2007-08-23 08:48:36 · answer #1 · answered by glenn 7 · 0⤊ 0⤋
this is the generally idea. however you need to look at what similar homes in the area have been selling for over the last 6mos minimum. also does the home need improvements? generally it will need more than what you think. what is the average market time for similar home in the area? is it in a desirable neighborhood? if you cant sell it will you be able to make any paymnts and pay taxes? would it be a good investment as a rental property if it doesnt sell? you shouldnt just look at the cost of the house itself. you will have to pay agent/broker fees if you sell- again cutting into your bottom line. i would encourage you to do some reading on real estate investing. the abcs of real estate investing is a great book. the price should not be the deciding factor. calculate the net operating income of the . have you research what the property sold for previously? have you talked to anyone in the neighborhood? get a feel for the area and what goes on. houses that seems like a steal arent always, i hope it is, but just be careful.
2007-08-23 08:49:18 · answer #2 · answered by lilmama24 3 · 0⤊ 0⤋
Foreclosure, FSBO, Listed w/Realtor, abandoned, tax sale...doesn't matter where you get it as long as you follow the following rules.
As indicated, you've got a LOT to learn before you make this leap. However, here's the basic formula that's served thousands of rehab investors well. Never, never, never (did I mention, never?) pay more than 70% of Full Market Value (as determined by comps, not list prices) MINUS any needed repairs to reach your Maximum Allowable Offer (MAO).
Got it?
FMV X .70 - repairs = MAO
And you never want to pay MAO if possible. Learn to negotiate. Especially if you're not doing the work yourself!
Learn it, know it, live it. If you stray from this formula, you're going to a seminar...at the school of HARD KNOCKS!
There's a ton of books/cd's/dvd's out there from every real estate "GURU" on the planet. Ron LeGrand's stuff is a very good intro into the business but for a free forum FULL of good information join The Creative Investor forums at www.thecreativeinvestor.com
Please keep in mind that HGTV makes it look easy. And what they skip over is the most important part....You don't make money in Real Estate when you sell, you make it when you buy!
HTH
2007-08-23 10:01:48 · answer #3 · answered by Anonymous · 0⤊ 0⤋
A foreclosure house in our neighborhood needed all the wallboard replaced in the entire house because the evicted home owner smashed holes everywhere. Another one I know of had the heating oil tank drained into the basement. Be careful when considering them.
2007-08-23 08:49:48 · answer #4 · answered by Anonymous · 0⤊ 0⤋
You have to be careful,,,,it might have a lien on it.
A lien (property or tax related) is a legal encumbrance against the value of a property, that is put in place for non-payment of monies owed for property related improvement materials and/or services (or back-taxes owed against the property). The lien is not against the owner of the property. This makes a property with a lien against it very difficult sell because any liens against a property are automatically paid before a new mortgage can be applied, and no bank or mortgage company would allow this, and very few purchasers buy with cash only. This can be a good investment for investors with cash able to take advantage of distress sales.
2007-08-23 08:48:43 · answer #5 · answered by Anonymous · 0⤊ 0⤋
You make money when you buy, you realize money when you sell. If you're asking this question, chances are you haven't done your homework and will lose money. Buying a house in foreclosure is more difficult than just buying the typical house that's for sale.
2007-08-23 08:43:37 · answer #6 · answered by heart_and_troll 5 · 2⤊ 0⤋
Most foreclosures wind up needing massive amounts of work due to hostility from the previous owners .
Built in appliances , lighting and many other things are stripped .
But go check them out , it is the only way to learn .
AND remember , your prospective buyers might have trouble getting the mortgage loans now !
>
2007-08-23 08:45:14 · answer #7 · answered by kate 7 · 2⤊ 0⤋
You've got the concept of flipping down. However, in practice, it is sometimes harder than what you stated. Most of the foreclosures have hidden defects so it is imperative that you do your homework on the property. Buyer Beware!
Hope this helps...
Check out TaxSaleWealth
http://www.taxsalewealth.com
2007-08-23 09:32:55 · answer #8 · answered by Anonymous · 0⤊ 0⤋
The smartest thing is to buy the worst house in the best neighborhood then bring it up to standard.
2007-08-23 08:44:41 · answer #9 · answered by Suzy 5 · 2⤊ 0⤋