If you are anything like me, then you just can’t get enough of the “house flipping” shows that are all over the home improvement television channels these days. In fact, at any given time, there are 2 or 3 “make money flipping houses” shows being broadcast. But how true is the picture they paint? Can you really buy, rehab and sell a house on the budgets shown? Can you make big money flipping houses?
Here are some of the main considerations to take before going off to be the next real estate millionaire.
Buy Low, Invest High
I don’t care what kind of deal you think you may be getting, if the house is incredibly low priced, then there is a reason. The key to understanding this concept is knowing that if the bank could have gotten 90% of the value or more, then they’d have sold it to a home buyer themselves. The fact that they are willing to sell to you for a 70% reduction means there is something major going on that is not worth their time and energy, thus the low price for you.
You should expect that on a super low priced house, you may need to overhaul the plumbing and electrical, as well as repair major foundation issues. These tasks would scare away many investors, but you should jump on them and spend the money it takes to get them done correctly and safely.
Location Location Location
I would never recommend you buy a house in an area where there is high crime or high foreclosure rates or both. You have to think about the fact that the housing market is not going to recover anytime soon, and those areas will continue to struggle, thus meaning that you house will be tougher to sell. If you want a quick sale, then wait until you find a super low priced house that is still in a good neighborhood. This is possible but takes patience.
Make The Big Things New
The quickest way to sell the house is to entice your buyer with some very nice, and very new utilities and appliances. In this vein, you should almost always seek to install a new furnace, new water heater, air conditioner and even a new roof. In addition, new appliances in the kitchen, including a dish washer will always play well with buyers. If you hit this hot buttons, you are sure to get a sale.
Fresh Landscape The Outside
The final piece of this house flipping puzzle is the actual square footage. If you have an unfinished basement in your house, go ahead and add in a bath and bedroom or two. The more bathrooms and bedrooms you have, the much better chance of finding a family to buy your home.
So now are you ready to go out and get the house flipping bug? If so, just be careful and have fun. The money will follow soon enough.
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