Posts Tagged ‘buyer’

Is Flipping a House Right for You?

Reality TV shows have shown makeovers to full remodels. In most cases the results were good. The fad started, with actual craftsmen demonstrating fix it projects and has evolved to wanna be actresses and investors trying to one-up each other. This has caused people to sit up and say, “Hey, I can do that, and I can make a fortune!” House-flipping shows seem to be everywhere on cable these days. But is what you see on TV accurate? Can the process really be that easy? Let’s take a closer look.

The first step is financing. Can you afford to take on a second home and remodel it and still keep up with your bills? You should have an idea as to how much your total budget is going to be for the project. Make sure to factor in double closing costs on the target home, contractor overruns because things are bound to take longer than you thought, and then money for unforeseen problems.

Once you’ve got a realistic budget, the next step is to find a home that you think is flippable. Most people go into these projects with a property already selected. However, for some, searching for a saveable house that is within their budget and at the same time will be sellable can be extremely difficult. Many people are out there looking to flip houses, so competition may make finding one for yourself difficult.

Once you’ve found your property, you have to go through the buying process. Negotiate hard to get the best price. Do not be afraid to walk away from a deal if the numbers are not right. Expect delays and make sure you have the property inspected by a licensed inspector with great references. Also, be aware that closing costs can fluctuate dramatically.

Your contract was accepted, the house is all yours. Now what? If you have not already gotten a contractor’s bid or several bids the next best thing to do is to bring in an expert. You may need help seeing everything that needs to be done. Inspect electrical and plumbing systems. Interior design may require changing the floor plan. Flipping a house correctly is a huge job, and you have to be prepared to spend the money.

Be prepared to dedicate as much time as needed to the project once renovations have started. The things that you can do yourself will save you money, but don’t budget your time as free. Call in experts for the big jobs and anything you are not good at.

Once the property is complete and staged properly, have it reappraised. When you’re ready to sell, market the house. Don’t be afraid to use non-traditional methods of selling it, like the Internet classifieds or an auction. You need as many qualified buyers to your house so you can sell it as quickly as possible and stop making payments on it. The longer the property stays on the market the less profitable your house flip will be.

House flipping has become one of the most publicized ways to make money for average people. But be prepared to go into your investment with determination and the confidence you will need to succeed.