Over the past five years or so, flipping real estate has gone to the forefront of real estate money making opportunities. However, flipping real estate is not for the weak, weary, broke, or inexperienced. It takes knowledge, time, dedication, an array of contacts and resources, and of course, money.
Not every cheap or well priced home is a good candidate for a successful flip. Some homes are sold under market value and don\’t need any repairs or upgrades. Buying one, putting in thousands of dollars in unnecessary renovations, and then trying to sell it is not good business. Your improvements could price the home above others nearby reducing its salability and costing you a fortune.
The perfect flip is a home that actually is in need of many repairs. This is the reason you will be able to buy it for really cheap. However, to make this work, you also need to know how to do this for a minimum. Either do it yourself, call in some favors, or find contractors you have worked with before who will charge you reasonable rates and do a good job. This is the only way you\’ll make any money.
If flipping is something you really want to try, learn as much as you can about the construction industry if you don\’t know already. You can\’t manage a project if you know nothing about it. For instance, if the basement is flooded you\’d better be able to know for certain it\’s because the hot water heater died, and not because the main water line burst. If you can\’t tell the difference, an unsavory plumber could charge you thousands of dollars for unnecessary repairs. And you\’d deserve it.
Before deciding to buy a property, it\’s vital that you actually see it. Too many first timers find a property online and actually buy it sight unseen. Big mistake! What happens? When you finally pass papers and go see it for the first time, you are guaranteed to find problems that were never disclosed. Serious cracks in the foundation, a completely flooded basement, old leaky plumbing, and outdated wiring can force you into bankruptcy before even lifting a paint brush.
Another point to keep in mind is that if you are using a real estate agent to find you properties to look at, don\’t let him steer you towards a home because he says it\’s a good flip opportunity. He doesn\’t know. He\’s a real estate agent who will make a commission on whatever he sells you. He is not an expert in flipping properties.
Get a home inspector to give you a report even before you make an offer. Don\’t waste your time on a house you can\’t afford to fix.
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