Flipping Houses – Can you actually make money?
What is flipping houses? You’ve probably seen it advertised on television. Some weekend long course where you go and some “guru” teaches you how to make money by buying a home, fixing it, and then immediately selling it for a profit.
BUYING A HOME, WHAT IS AN INVESTOR FLIP?
An investor flip (also called a flip) is a home or property purchased with the intent of the buyer to make a profit, generally by making changes to the property and reselling it as soon as possible (commonly known as flipping houses).
When the recession hit around 2008 and many homes were in foreclosure or foreclosed, investor flips were en vogue. That’s because home prices were very low. Investors, particularly cash buyers, were able to take advantage of the high property inventory and the low prices in order to purchase properties for below market value, make some changes, and then resell the same property (with upgrades) for an almost immediate profit.
Investor flips are still around, but they are fewer and further between. That’s because the market has changed, and lots of buyers who lost their homes a few years back in the Recession can buy again right now.
SOME INFORMATION ON INVESTOR FLIPS
Here are a few important things to consider when purchasing a home to flip:
- You need to carefully include the costs of sale and purchase (in addition to repairs) in order to confirm that you will make money.
- You need to be absolutely certain that you can resell the property fairly quickly for the price you want. (That is, be sure it will appraise at the increased value.)
- You need to have your repair folks ready to roll. Time is money and you do not want the property to sit after you buy it for any period of time.
If you or anyone you know is thinking about buying a home that is an investor flip or ready to do house flipping, we can help. Feel free to call the experienced agents at Broadpoint Properties.