Many real estate investors have been making a lot of money buying homes and turning around and selling them in a short amount of time. You can make huge profits in real estate flipping if you know what you’re doing. People have been doing this for some time. They purchase modestly priced homes, sometimes foreclosures, then they fix them up and sell them for a profit. There are some ways you can follow this trend and make a profit, too.
“Flip This House” on A&E popularized this trend of buying and selling properties for a profit. It has allowed investors to make large sums of money on fixing up homes and selling them to home buyers. The show explains how they buy, fix, and sell and, by the end of the show, the owner has revealed their asking price for their renovated home and has an expert assess the value of the property.
Flipping homes is a lot more detailed than what is shown on television, even though many of the details are discussed. There are some things to remember if you are planning to buy a home in order to sell it.
What is the market value of the home? Have you looked at the house to see what repairs need to be made? You have to know the total cost, including purchase price and repairs before you buy in order to make money off of it. Is it worth the cost to put into it?
Is the neighbourhood promising? Is it a good neighbourhood? Is it in an area where people are buying? Take a look at the market value in the neighbourhood you are considering buying. If it’s in an area where people are buying, you are likely to make a profit from flipping.
Be prepared to begin renovations immediately. You will have to get building permits right away. And if you hire a contractor to do the work, make sure they know exactly what it is you want done and how long it must take to get it done. Getting the work done quickly is essential because if you hold onto the property for too long, you will end up having to pay the mortgage, real estate taxes, utility bills, etc. If you have to pay this money out, it will take away from your profits.
Once the repairs are completed, find a real estate agent who can figure the market value of your property. With luck, the value of the home will more than cover the cost of what you have put into it. You’ll have to take into consideration your closing costs, attorney fees and any other expenses that are associated with the selling of the home.
Once the deal is final, the money you have left after all expenses is yours to keep. That is your profit. Keep all receipts and detailed records of everything to figure your costs and profits. In time, you will become a pro at flipping houses and could potentially make a great deal of money doing so.