Let us begin with a short explanation of the term itself. Flipping houses is process of obtaining a household, redecorating and improving it if it is necessary and making a profit by selling it at a significantly greater price. It is as easy as that. So, why is not everyone in the house flipping business then? Because things are not as simple as they may appear at first glance. House flipping is potentially a very profitable business, but, in order to make money there are several things that need to be perfectly executed. This is what needs to be fully and constantly addressed.
The properties that are usually looked at in order to be flipped and made profit from are foreclosures. The foreclosure crisis has been going on for almost a decade now and although the situation is not as dire as it was 8 years ago, the situation is going to worsen again. The estimate is that around 1.5 million homes will be foreclosed in 2016 while grim predictions say that another 5 million are in danger of becoming foreclosed this year, as well. These figures clearly speak for themselves.
There are various places other than foreclosures that could contain potentially profitable houses to be flipped. These are ads in the local newspapers, websites that deal with house sales market, radio and TV station ads and practically every other place that deals with real estate trade. Last but not least, a word of mouth. The closest neighborhood is very often an area where some of the best deals can be made. Therefore, keep your eyes and ears open and stay on top of things, ready to react promptly.
Location is probably the most influential factor when it comes to profitable house flipping. Respectable and peaceful neighborhood, the vicinity of good schools, ambulance, stores and other public institutions, a good infrastructure and greenery are just some of the most prominent features when the price of a property is concerned. Getting to know the neighborhood is strongly recommended as well since it will provide additional information on how profitable the flipping of a property could be. Also, a prosperous neighborhood before it becomes prominent could be a gold mine.
House inspection and renovation
A detailed inspection of the entire house is one of the most crucial house flipping tips that absolutely needs to be followed. Check every corner of the interior and exterior, attic, basement and garage included. Write down everything that is faulty and get a quote from a construction specialist for the overall costs of renovation. These figures are another key data that makes flipping profitable or not. One thing is for sure, major construction works, such as roof replacement, insulation installment and rewiring are to be avoided at all times.
Time is not always money and you will need both
It is very rarely the case that a house is profitably flipped in a short period of time. Even in cases where there is little or no renovation work to be done the legal and ownership paperwork alone takes time to complete. With renovation in the picture, it will take some or substantial time, depending on the scope of work to be done, before you are able to make a profit. Therefore, be patient.
Also, it is absolutely necessary that you have some financial reserves before you venture into house flipping business. You will need to pay for the property, paperwork, renovation and all ongoing expenses before the house is flipped, including property taxes, insurance and utilities.
Yes, there is money to be made in house flipping. However, in order to do so one needs to be a thorough researcher, meticulous inspector, a patient businessman and above all on top of things at all times. The more so, the bigger the profit will be.