There are lots of ways to make money in real estate like property rentals and leasing to tenants, to home selling. While these real estate investments are profitable and only require minimal supervision, first-time and seasoned real estate investors are gearing towards house flipping primarily because of its overflowing potential to earn money in a relatively short period – especially if you’re doing it the right way.
If this is your first time in house flipping, check out this article written by Margaret Heidenry in Realtor.com about doing house flipping the right way for both first-time and seasoned investors in the housing market. Read the article below to know more about house flipping.
Flipping a House? How to Flip a House the Right Way
Wondering how to flip a house? In real estate, flipping houses has become all the more popular thanks to TV shows such as HGTV’s “Flip or Flop” and “Masters of Flip.” The goal is to buy a run-down home, put money into renovations, list it on the real estate market—and profit, big-time! For real estate investors, flipping houses may have hit its peak in the bubble years leading up to the 2007 housing market crash, but this is one dream that definitely hasn’t died. Many investors are still making money. However, just because you’ve watched a lot of HGTV shows doesn’t mean that you know how to flip a house for a profit.
How to flip a house in real estate to make money
“Stick with the age-old adage of buying the cheapest property in the nicest neighborhood,” says Eric Workman, senior vice president of marketing at Chicago-based Renovo Financial, a private lender specializing in the real estate house-flipping space. But don’t pick just any old shack—look for a home with “good bones,” Workman says.
Translation: Look for a property that’s structurally sound and has a decent roof, newer windows, and an HVAC system that’s less than 10 years old, as well as modern electrical and plumbing.
Next, an ideal flip should need only cosmetic changes such as new cabinets, countertops, flooring, and paint. Any other renovations will be more costly and cut into your profit on the property.
How much should you pay for a house you’ll flip?
Investors should set a goal of making a 10% to 20% return on their investment. So how do you crunch the numbers? For starters, find out what your fixer-upper will sell for once you’re done with it by looking at the sales price for similarly sized real estate in the same neighborhood that are move-in ready, says broker Bobby Curtis at Living Room Realty in Portland, OR.
As for financing a flip, it isn’t that different from buying a regular home. You’ll either pay cash or take out a mortgage—just consider going for a 10- or 15-year mortgage, which will offer a lower rate. If you’re right on the money, odds are you won’t own this house for long anyway. Read full article here…
House flipping is a type of real estate investment where the investor buys a house and then selling it again for a profit. In a nutshell, an investor applies renovations to certain parts of the house to increase its market value. However, while it is true that applying renovations or improvements do increase the house’s market value, the cost of renovation might end up higher than the estimated profit you could get from selling the house later. A rule of thumb in house flipping is that look for a property to flip that’s in good condition structurally with intact roofing with intact electrical and plumbing, etc.
Now that you know the basics of house flipping and wanted to do it as a career or as a primary money-making investment, you need to know not just the fundamental principles, but also the most essential toolkit you must have to become successful in house flipping business. To know more about these toolkits, check out this article written by Meredith Wood at Fundera.
How to Start a House-Flipping Business: Your Essential Toolkit
Shows including “Flip or Flop” and “Flipping Out” have a firm hold on U.S. television sets, and house-flipping is at a six-year high. There’s no wonder, then, that more people than ever are interested in how to start a house-flipping business. For enterprising investors who aren’t afraid of hard work, flipping a house is an exciting opportunity for short-term investment. But there’s a lot of research to be done, plus financing and resources you need before you start a house-flipping business yourself.
If you’re one of those enterprising investors who wants in, you’ll need to know more about how to start a house-flipping business. Follow this guide to help you develop a business strategy, plus determine and execute the optimal financing plan. To get started, watch this video for some tips from a pro real estate investor and house flipper:
Before You Start a House-Flipping Business
Before you can start a house-flipping business, of course, you need to learn as much as possible about the industry—and your own finances, too. Here’s where to begin:
Assess your skill level.
Identify the location for your short-term property investment, and what kind of renovations make sense with your available capital and knowledge. Depending on your experience, determine what kind of building and extent of renovation you’re equipped to oversee.
Get a pulse on the real estate market you want to flip in.
Scout property opportunities in your network or local market first. If you’re interested in investing in an unfamiliar area, talk to local homeowners and real estate investors to supplement your research. Here, knowledge is everything.
Starting a house flipping business is extremely difficult especially if you don’t have any idea what you are doing. You might end up losing money instead of earning profits from flipping houses. Apart from learning the real estate industry, you also need to learn your finances on how you are going to acquire the property; whether you pay it in cash or through a mortgage. You also need to assess your knowledge and skills for these will determine your flipping success. Lastly, you need to get to know the latest real estate market trends you want to flip in. Do advanced scouting, visit the area, etc. for you to know the current condition of the market.
Failing to have the toolkit and house flipping mindset will just lead you to lose money than earning, and there are lots of horror stories of those who lose huge amounts of money by simply not preparing. On the other side, there are stories from people who achieved huge success in flipping houses. Gabrielle Olya of Go Banking Rates shares real-life house-flipping success stories that can influence and inspire other aspiring investors.
Real Life House-Flipping Success Stories — and How To Do It Yourself
House flipping shows are all over HGTV, where you can see pros with entire teams flip homes using seemingly unlimited resources to turn huge profits. But you don’t need a TV crew and an on-camera personality to be a successful house flipper.
GOBankingRates spoke to four flippers, many of whom have turned six-figure profits on their investments. See their incredible before and after home transformations, and find out their best tips for how to start flipping houses yourself.
He Used Online Marketing To Find His Flip
Brian Rudderow, CEO and owner of HBR Colorado, has successfully flipped homes throughout Colorado.
“I use online marketing and search engine optimization to drive leads to my own personal website,” he said of how he finds his flips.
One of his most successful flips was a Colorado Springs home he purchased for $75,000.
“It was in a great neighborhood where the real estate values were skyrocketing,” said Rudderow.
How He Flipped It
Rudderow invested $60,000 to make a full renovation of the home that included new siding, a new roof, a new deck, new flooring and a new kitchen. He also finished the basement and remodeled the bathroom. Thanks to his improvements and an eye for finding a home with resale potential, Rudderow was able to sell the home for $249,900.
Profit made: $114,900
Those are some of the success stories of real people who found huge success in housing flipping. However, their success did not come overnight. These people experienced lots of failures, losing money in the process. The most important thing is that they learned from these mistakes, turning them into motivation to learn how house flipping works and how the expert do it.
Becoming successful in this type of real estate investment starts with the right mindset and being eager to learn at the same time taking a huge risk of losing your capital. If you think you’re ready to become house flipper and looking for the first house to flip, Dependable Homebuyers can help you find the best home deals for house flipping. To know more, visit them at https://www.dependablehomebuyers.com and let them help with you in finding the best home deals on the market.
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