2007-12-17 01:28:22 · 4 answers · asked by b_hah 1 in Business & Finance ➔ Renting & Real Estate
It's pretty basic. You buy the run down home, make the needed repairs, and put it on the market. Of course, that's the easy part. You also gamble that you didn't overpay for the house in the first place, that you can do the repairs for what you estimated, and THEN that the house will sell for more than your invested amount.
Right now, NONE of those are good bets.
2007-12-17 01:33:32 · answer #1 · answered by acermill 7 · 1⤊ 0⤋
There are tons of books and cable tv shows that walk you through the aspects of flipping. The hardest thing will be finding a home that meets your criteria. You will need to find the ARV of the home then subtract the repairs, closing costs and any holding fees you come up with and then subtract your profit. That would give you the max you should pay for that house. Typically investors use a rule of no more than 70% ARV because thats what we can get a hard money loan for. Example if the home's ARV is $100k you would offer 70k (includes all repairs etc.) leaving you a profit of $30k, this is just a text book case. I would not touch something that would net me less than 15-20k. Remember now is a great time to buy but may not be the best time to sell in your area do your homework.
2007-12-17 11:17:50 · answer #2 · answered by MV 2 · 0⤊ 0⤋
You identify subject properties, fix them and sell them.
With all the interest in flipping fueled by the TV shows, it has driven up the prices of subject properties. This means you will have to pay more for a house than you would have before the flipping boom started.
Contractors are a notoriously challenging lot to deal with, if you cannot do the work yourself.
You have to know your market, what potential buyers are looking for, what trends are selling homes and such.
Since it is a buyer's market, it can be tough to sell quickly for what you need to get. Make sure you are financially secure enough to carry the house on your inventory for several months if it doesn't sell.
2007-12-17 13:53:32 · answer #3 · answered by godged 7 · 0⤊ 0⤋
depends if you know how to handle code violations, unruly contractors and know what the public wants to see.
and of course money in cash to buy it, repair it, pay the contractors and then sit on it for months, maybe even years until you find a buyer.
2007-12-17 10:40:19 · answer #4 · answered by Anonymous · 0⤊ 0⤋