Real Estate Investing by Flipping Houses
In today’s economic times, the interest rates are dropping and foreclosures are on the rise. For you, real estate investing, if done correctly, can be beneficial. Purchasing a house and “flipping’ it can be a lucrative investment if you can do a lot of the muscle work yourself. “If” being the big word here.
“Flipping” a house is a term designated to purchasing a piece of real estate that needs work or a “Fixer Upper” as my generation used to term this type of property. This form of real estate investing has been highly popularized through the popular A&E TV Show appropriately titled, “Flip This House.”
Remember in school when you made a list of your homework? Ok, so I was a geek in school. Flipping a house requires you to do your research (cool internet here I come), check the average prices for surrounding property (ok, free exercise walking the neighborhood), similar to the one you are considering. You then need to prepare a list of what needs to be updated, brought up to code (here come the headaches dealing with the local government), or to make the property more appealing. When making this list, don’t forget the outside of the building as well as the grounds. Think about it, would you rather purchase a house that looks like a mansion or a house that looks like a shack? If you are not sure what should be done to make the property increase in value to re-list on the market at a higher price than what you paid, call your realtor and ask what most people are looking for in real estate.
Once you have this list, look to see what you know you can do yourself, what you think you could do, and those you would need to contract out to others. If you can hammer a nail, use a paint brush, can see what needs to be done, and willing to put a little elbow grease into it, you should do what you can on your own. Not sure how to do this? Then I would suggest a visit to the local library for self help books, check out the internet, or let your fingers do the walking in the yellow pages. One word of advice, keep ice, Band-Aids, turpentine, and your cell phone close by, trust me on this one. Band-Aids help to keep the blood off of the property.
After you have updated the rooms, made sure everything is up to code, the inside and the outside is aesthetically pleasing, plants and foliage around, you are now ready to have your best friend walk through and let you know what you have missed, hey what are friends for if not to let you know what you have missed. You have made the property to compare and compete with the surrounding properties.
Now it is time to figure the cost of what you should list the house. You have the cost you originally purchased the property, the amount it cost you to do the repairs or have someone else do the repairs. As long as the repairs, updates, and changes you have done have been done correctly, you have increased the value of the house. Now is the time to bring in your Realtor and work with them to set a price for the property at a nice profit. Real Estate Investing conducted through the process of Flipping Houses can indeed be a considerably profitable venture, yet if not done correctly, could also be significantly costly as well. It’s all up to you my fellow real estate investor?
Join the conversation.
