Buy-Repair-Sell (Flipping Houses) For Quick Gain in Real Estate
One of the rising stars when it comes to real estate investment is known as “Flipping Properties". It works by buying properties that need either minor cosmetic repairs or serious renovations, doing the work, and selling the home for a much higher price. Theoretically, this brings in a significant amount of profit in a rather small amount of time. It is the case for many who attempt to flip properties, but it takes a little more than the idea to make the process work. For this reason, many who end up sacrificing profit or losing money in the process when plans aren’t well-conceived.
If you are considering investing in real estate, this is one of the quickest ways in which investors can turn a profit. It is also a method for bringing in high profit in a short amount of time. Unfortunately, this once closely guarded secret has gained some degree of infamy and there is fierce competition for the undervalued properties on the market as more and more investors decide to throw their hats into the collective ring.
If you are considering real estate investments in general and house flipping in particular, there are some things you should keep in mind.
1) Treat this as a business rather than a hobby. Far too many investors do not take their investments seriously. It is a mistake because in this business, time is money and, every month the house remains unsold is a month that the house is costing you money. Create a plan, make a schedule, and stick to them both.
2) Remember that this is a business. You are not investing in properties to make friends or seem nice. You are in this business to turn a profit. You cannot be timid about making low offers. The ability to buy low and sell high is the lifeblood of this particular business. It means that you are quite likely going to hurt feelings and make people angry (because they often place emotional prices on their homes that are not economically feasible). If you cannot deal with this reality, then you are going to have some degree of difficulty gaining the high profits you are seeking.
3) Pay attention to the market. It is vitally important. Many flippers lost their shirts in recent near-collapse in the housing market around the U. S. The truth of the matter is that the indicators have been building for years. In cities where there was once a shortage of viable housing choices, there are currently surpluses. It does not drive the value of properties down so much as it brings them back to their proper values. Investors who were counting on an ability to sell above actual prices were left holding the bag (or rather notes) on these properties for quite some time until they could sell them. Some investors never could sell the properties and had to deal with the expenses and costs of the upgrades. Do not buy when the market is suffering from inflation, except at the very beginning of the inflation period (before property developers have the opportunity to create a surplus).
4) Do not allow it to become personal. Far too many first-time house flippers decide to create a work of art rather than a business investment. It is tempting when making cosmetic and structural repairs to go ahead and create a dream home. Depending on the particular market, you are unlikely to recoup the costs involved in doing so. The goal is to invest little and profit large. Granite countertops are lovely but not at all necessary in a neighborhood filled with those of humble means. Cater to the tastes and budgets of your target market rather than yours.
Despite the risks involved in flipping houses in real estate investment, there is no denying that fortunes have been made doing just that. Even in the current housing market, there is a great deal of promise available to those who can do the work quickly and inexpensively. People still want to buy these lovely homes rather than buying a home that needs to be made over after the price of purchasing.