Like all investment strategies, flipping properties entails a certain amount of risk. However, by planning carefully and following a few intelligent house flipping tips, it is possible to make a decent return on such an investment. Although most commonly associated with rehabbing houses in need of repair, there are also ways of flipping properties that do not require a large investment in renovation (though you should not discount this, particularly if you have construction and remodeling skills).
Definition of “Flipping”
“Flipping” is nothing more than the age-old practice of buying low and selling high. In this case, the product is a home or other property. These may be “distressed” properties that have been foreclosed upon, or fix and flip real estate that is in need of repairs. In either case, you are looking for properties that you can get for a low price and that you can unload quickly at a higher price.
More House Flipping Tips
Whether you are looking into rehabbing houses that are in need of renovations or simply want to do a quick turnaround on a property that has been foreclosed upon, your first source should be local banking institutions. These banks usually maintain listings of foreclosures; some of these may include homes and properties in need of rehabbing. Houses like these can make for excellent fix and flip real estate investments for those with the requisite skills, equipment and resources.
Another source of properties that are suitable for fix and flip real estate transactions is the real estate auctions. You can find many of these online, but be aware that so can everyone else on the Internet. Those with the skills and resources for rehabbing houses in need of repairs can find some great deals at real estate auctions, but keep in mind that the bidding can be highly competitive.
Most people starting out do not have the resources to finance a fix and flip real estate transaction on their own. The best option in this case is to obtain a short-term mortgage that you will pay off immediately when you sell the property. Another issue to be aware of however is local ordinances that may require a buyer to remain in a home for a certain amount of time after purchasing. If you are rehabbing houses that need repairs however, this is not likely to be a problem since such renovations usually take several months in any event.
Flipping properties requires advance planning and smart strategy. When flipping properties as an investment, be sure to educate yourself about the market and be sure to have a buyer lined up well ahead of time whenever possible.