I've always just deemed this type of real estate as just too risky, and a game that only big boys. Just wondering, for instance I live in Gary, and a lot of the properties are selling wholesale for 5-10k wholesale. Now if you could find an appraiser, to tell you the market value of the home after improvements. Lets say he told you 55k. Lets say you found a contractor that told you he could do those proposed improvements for 15k. So now you just do the simple math..lets say..20-25k invested plus 10k incidentals(gas, taxes, insurance etc) so potential for a max investment of 35k..say at the least house will sell for 10K under market value..which leaves you with a clean 10k. Is it really as risky as I once thought?
2007-09-02 20:23:14 · 5 answers · asked by night_taker_1999 2 in Business & Finance ➔ Renting & Real Estate
Risk is your friend. There are some risks worth it. An appraiser can tell you approx what a home might be worth after repairs, but what about the investment aspect of real estate. You can fix the home and rent it for more than the month mortgage. It will appreciate over the years, and you can actually make a steady stream of income. Do some more research and talk to people who flip properties. Yes it's risky, but the reward is sweet! (I took the risk and 10 years later, my property, which I bought for $180k is now worth $850K) I use the equity to buy more. Try it!!!
www.daniellemarguerite.com/realestate
2007-09-03 06:12:46 · answer #1 · answered by Anonymous · 0⤊ 0⤋
I think you make money fixing up and reselling houses when you have the ability and/or the cash to hire reasonable help. It's the old story that the right things need to be wrong. Be very careful about lead paint, abestos and code violations. When you resell the house you will be liable for anything wrong. But it's just like anything else, if you know what you're doing, figure all the angles and are willing to do the work, there is money to be made. There used to be pretty good money in rehabbing. Also be careful as there is a housing glut right now. You can substantially lower the risks by doing the research. And there is always something else wrong with a house so that it costs more than you think. . .
2007-09-03 09:27:13 · answer #2 · answered by towanda 7 · 0⤊ 0⤋
"Flipping" homes in this manner is RISKY. Especially if you do not have the liquid capital to 'float' the note and repair costs while the home is not sellable or rentable.
If you can not sell - can you rent the property - will you still have positive cash flow? These are all items that should be addressed NOW rather than later.
Do research in that area - what is the average days on market before a home sells? Do you have a relationship established to assist in the sales process, rehab process, lending process.
When done correctly, this can be a very profitable business, done poorly it can bring financial ruin to you and your family VERY QUICKLY.
Hope this helps, and Good Luck
2007-09-03 09:34:07 · answer #3 · answered by Anonymous · 0⤊ 0⤋
go to www.realtor.com and see what the homes are selling for
so example..your home is a one garage home in a 2 garage neighborhood..and you put up a $20k garage to make it comparable and the difference is $5k??
contractors........you need to have a guarantee of a price/estimate..and usually when stuff gets taken down..seldom is it a simple repair..it is usually a bigger job..and needs more money..
so do your homework...............if homes say..20 are available in the neighborhood.......and you buy..can you go cheaper??? and how long are these homes on the market..
lots of reasons.....why people lose/gain money..
2007-09-03 04:00:31 · answer #4 · answered by m2 5 · 0⤊ 0⤋
Yes, it will be harder to sell quickly. Selling quickly is what keeps it profitable. The fall of the mortgage industry will make it harder for anyone to get a mortgage loan, not just those with bad credit....
2007-09-03 03:31:59 · answer #5 · answered by Anonymous · 0⤊ 0⤋