Learn How to Flip Homes
Now more than ever, financial freedom can be achieved through flipping houses. If you are wondering how to flip homes in today’s housing market, the same rules apply as they did during the ‘housing boom.’ There is still plenty of money to be made, especially if you take a look at the deals available through foreclosures. Finding and purchasing homes that are in various stages of foreclosure is easy to do these days, especially in Florida.
A home in pre-foreclosure is the ideal opportunity for an investor looking for a house to flip. During this stage, the homeowner has defaulted on one or several of his payments but the bank has not taken control of the property yet. During this stage, a homeowner in financial trouble is often willing to sell the home at a fraction of its actual value just to get out from under the payments and gain some fast cash. When a home is in pre-foreclosure, both the investor and the homeowner can benefit.
The key to making the most of your home flipping opportunity will lie in your ability to predict how much money it will take to get the home ready for the resale market. Before jumping into home flipping, be sure to do your homework first. Some of the first steps include the following:
• Know the value of the neighborhood. The deal may look great, but before you invest, be sure the area itself has value. Take the time to study the other homes in the immediate area to see what they have sold for.
• Sometimes there is just too much work to be done. An ideal house flip is going to involve cosmetic work only. Paint, yard work and even new flooring are reasonable and expected expenses. If the house is seriously in need of a new roof, plumbing or electrical work, you should get a professional estimate before investing.
• Time is of the essence. The more work that needs to be done, the longer it will take to make a profit. If you financed the home, then every passing month eats into your direct profits. Try to purchase a home that you can repair within two weeks and immediately put it on the market.
• Figure in all of your costs. Aside from the repair work, there will be other fees to take into consideration such as the cost of the appraiser, home inspection fees, real estate agent, etc. It’s better to estimate high and come out with more profits than the other way around.
Don’t expect to purchase a home and sell it the following week. This kind of thinking is what causes many home flipping projects to fail. Take into account that there are currently more available homes than there are buyers. Home buyers are using this as leverage to purchase at the lowest possible price. Unless you are able to purchase a house at an incredible savings, don’t expect it to sell at a large profit, unless you are willing to wait for the market to pick up.
If you are able, it would be best to purchase a home, do the necessary repairs and then expect to hold on to it for six to twelve months. During this period of time you can rent it out in order to keep an income coming in from the investment.
As with any investment opportunity, there is a certain amount of risk involved. If you are knowledgeable about the neighborhood, comparative home prices, repair costs and selling timeframe, you should be able to make generous profits off of flipping houses. Use our website to learn more about home flipping in Florida.
