House Flipping is the term used by investors who purchase a home for the sole purpose of quickly relisting the house for a profit. In many hot markets, a house can appreciate in as little as a few days! In these markets, it doesnt take long to realize a profit. However, this is the exception rather than the rule. More commonly, an investor purchases a home in a hot market, performs some general repairs, fixes obvious problems, paints, and replaces flooring. This means that the investor must hold onto the property for a few weeks to a few months. In this case, you must be able to afford to pay the mortgage for a few months. When searching for an investment that you want to flip, you must find the right property. Not all homes are good candidates for flipping. Certainly, buying a home in a depressed area would not be a wise decision. You should look for an ugly home in a nice neighborhood. Many potential investors ask whether they need to be a handyman or contractor to successfully flip a house. Not at all! You can be the general contractor and manage the house repair while you get it ready to resell. Of course, much of your profits will go to the people doing the work on your home, but you dont have to give up your day job to get the work done. When budgeting for your flip, a good idea is to get estimates from several contractors. Ask them to quote the price for the fix-ups, and more importantly, the amount of time it will take to complete the job. Remember that the longer the project takes, the more youll be paying on your mortgage. Once you have several firm quotes, double the amount of the quote as a closer estimate to what youll actually spend. Unknown problems will be uncovered during the remodel and youll need to have some extra capital and have extra time available to complete the job. Once you complete the project, get the house back on the market! And sell for a profit. Many people are successfully flipping houses as you read this. And many are making huge profits. But the first step is to start! So go buy a property and get it fixed up. Good luck! |
