Flipping Real Estate Property There are many popular t.v. shows that highlight flipping. I'll admit I have gotten hooked while channel surfing a time or two. After all, it's one of the more fun ways to invest. Taking a property, sprucing it up a little, and then selling for a profit is very exciting.
It's very appealing in two ways. First of all, it's neat to see something get rehabbed and made better. Fixing up an old car and making it look like it did the day it rolled off of the line is fun. Houses are no different. It's fun to come up with ideas to improve the appearance of an old house. Secondly, we are all addicted to the idea of fast money. Rental houses can make you rich but it does involve time. Flipping real estate property can bring profits faster. Now, just for the record I personally am a mixture of both. I believe in long term investing, but if I have the chance to make a quick buck - why not??? House flippers are regarded by some in a negative light. Some people see flippers as greedy, get-rich-quick types. Personally, I don't see it that way. Yes, there are some folks who are trying to get rich quick and are driven by greed, but not all who are flipping real estate fall into this category. Flipping real estate property can have some beneficial effects on the economy. For example, a couple gets laid off of work and before you know it they are behind on their mortgage. Pretty soon the bank decides to foreclose the house. Often times you can find these pre-foreclosures before they happen. You can offer the couple enough money to get out from their debt. Most times people will take a huge discount to avoid having a foreclosure on their record. You get a great deal, the bank avoids losses due to foreclosing, and the couple just greatly saved their credit. You might turn right around and sell for a quick profit or if the house needs some work you might rehab it. If you rehab it, you will no doubt spend some money (which helps the economy). So there are some real economic benefits to this scenario. The downside, at least economically speaking, is sometimes house flippers tend to blow up real estate prices which tends to distort the market. Or if the property has went to foreclosure it tends to drive house prices down in a market. Typically that is when foreclosures are in excess. Generally though purchasing foreclosures helps people and helps banks. A few key points to remember: You can be successful at flipping real estate property. Just take your time and don't start off with a complete intensive rehab. Start with something that just needs a little cosmetic work and stage it! Then save the real estate agent's fee and list the house as For Sale By Owner or FSBO Think like a buyer and deliver their dream home. A good rule of thumb for your first one is to have at least 20% equity in your purchase price and keep your rehab expenses under $5,000. As always, carefully evaluate your market and location. You can visit this site to see examples and follow real-life house flipping projects.
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