What are the ups and downs of Flipping Houses? Is it profitable, can you make it a career?

Answer 1

I am sure you can figure out the ups and downs yourself. As far as is it profitable, well if you buy at the right price and stick to your budget yes you will make a profit. I know this because it is my career, so yes you can make a career out of if. A very lucrative one if you are wise, and find the right buys. Make sure to hook up with a knowledgeable Realtor who understands your intent. This way they can advise you towards good low offers, and properties in desirable areas which need work.

Answer 2

The downs are that you can really loose you %#@#!

The ups are you MIGHT turn a profit if you can do most of the work yourself and you know exactly how to find homes at the right price and sell them quickly (not easy in today's market). Most home flippers made money on appreciation as well as on their remodeling efforts. Take the appreciation out of the equation and its a lot harder to make this work.

Especially now - there are lots of homes listed on the market in "as is" condition because they are foreclosures or banked owned properties. You really need to be an expert home remodeler these days to turn a profit. Quite often, there can be much more damage than you expect.

Most of the flippers I know are getting out of the business because it is not very profitable anymore. Especially when it can take 6 months to a year to sell the home. In the meantime, you will have to be making mortgage payments and paying for all of the repairs, the heat, electric, etc.

If you are not already in this business, don't try it. Find someone who does this for a living and work for them for a while. See how it goes. Homevestors is a company that flips homes - they are a huge nationwide firm. You might try working for them and see how much work and RISK is involved.

For most people, I would suggest you "just say NO!"

I hope that helps...

Hatlady

In the interest of full disclosure - I am a REALTOR® - licensed in Minnesota.

Answer 3

Read the news, there is a housing glut now and home prices are soft or are dropping all over the country. You could buy a house, put money into repairing it and not be able to sell it for your costs, not a recipe for success.
Conversely, you can make this housing market work if you can buy deeply distressed housing, make repairs and rent the property. (All those people losing their houses to foreclosure have to live somewhere.)
Being a landlord is a whole other set of problems, and the profit can be a long time coming. Go to the library and talk to the business librarian, he or she can point you to books that can give you the information you need.
And, in a couple of years, when the excess supply of housing is absorbed, you could sell your rentals.

Answer 4

Yes, there is definitely money in it. However, you can also lose money very quickly if you invest in the wrong things or can't sell the house quickly enough and must make loan payments. Not an easy job but some people get so good that they can make a good 50k off a new house every month or so. Do a lot of research and then some more. I highly recommend taking courses in real estate. It's hard work and very risky. Be prepared to lose money while starting out... your goal should be breaking even for the first few times.

Answer 5

If you do it often enough and well enough, you can probably make a career out of it. Much would depend, though, on what you paid for a property to start (you'd need to get it at well below it's market value) and how much you put into it during any renovations. You would then need to sell it at it's market value and hope that the sale price (minus all of the expenses) will net you an income.

I would recommend using a Realtor for this, as we have access to lots of tools that we can use to help with the buying (and more so selling) process. Naturally, you'll pay for that service, but it's better than doing it yourself.

Some who do this do the work themselves ... at least parts of it, while other hire contractors to do everything. Knowledge is the key ... if you can do the renovations, you can save a lot of money.

Answer 6

You have to be smart when flipping a house. You can't just go out and buy one without knowing anything about it. Sometimes there are problems that you could've caught before buying the house if you know what you are looking for. Usually to make a good profit you are going to either look in the lower income homes where you can get one for about 20,000.00 or you are going to have to put some money out and buy an expensive home. Either way you have to have money to make money.

Answer 7

The residential real estate market is on a downswing. The "flipper" is dying out as supply has started to exceed demand and prices have fallen. Only the strong have survived and not many are breaking into the market now.

I work with a lot of these people with my bank. Many have been hurt substantially by the current market. Their biggest problem is that they didn't have enough cash into the project going into it. It worked while the industry was hot, so they kept on going like nothing bad could happen to them. But since it dropped, the ones with no cash are STUCK and regretting what they had done.

I can not stress enough that you need to have a lot of capital built up, either into the project to start with, or cash reserves you can dip into. Especially just starting out. One bad flip, one big problem, just one thing can ruin your business as well as your personal finances.

Answer 8

The market is slow now, maybe a bad time to do it, I seen some good article about it at http://www.flipping-homes.com

Answer 9

This is one of those instances where it takes money to make money. And you have to be able to withstand a loss now and then.

Answer 10

you win some
you lose some