House flipping has become a form of investment when people finally realized that home ownership has a far more important purpose than being a form of shelter; it can be turned into cash too. “Flipping” quickly gained recognition on TV when “Flip the House” and “Flipping Out” went viral. These glamorous shows may seem a bit over the top, but underneath they do reveal a truth – that buying and restoring homes can be a profitable form of investment. Even though both show the tribulations and trials of spending a lot cash and hard work into revamping a home, eventually all efforts pay off.
The housing bubble burst
We cannot define the real estate market by things we see on TV though. It is important for future investors to know the facts. Savvy realtors and experts in the property investment domain know exactly what “home flipping” implies. The term may look promising and extremely glamorous, but there’s a lot more work involved when you’re doing this in real life. Flipping a home demands more than just instant financing and interior decorating. According to the Mortgage Bankers Association, 1 in 200 houses enter foreclosure, which means that an average number of 250,000 people remain without a roof over their head ever 3 months. A lot of these homes eventually end up “flippers”.
Obviously, house flipping for profit is no longer as profitable now as it was before 2008. And yet there are investors willing to take a risk, and even buy a Turkey property. Things are improving in the real estate market; home values are starting to increase, which is great news for everyone involved in the real estate market. There’s no magic formula to making a lot of cash with property. It can happen as long as you abide by a series of rules and strategies. Here are some guidelines to turning flipping homes into a cash cow.
Home flipping is a money-intense, complex job. Don’t jump in unless you understand the ins and outs of “flippers”. According to several experts in the field, a lot of people who chose to get involved in home flipping back in 2005 lost their homes, livelihoods, and even families. That happened because they entered a business domain they couldn’t fully understand; so they lost. Before getting started you should know the market data. Invest in other protects linked to real estate and develop professional connections with brokers and contractors. This will help you understand what “flipping” actually implies.
Ask for help from experts
It is impossible for a single person to manage a property from beginning to end, whether that implies renovating, building, or selling. One of the main challenges of a flipper is keeping renovation and repair costs reduced. That’s because at some point the cash you’ve invested in repairs can end up costing more than the amount someone would be willing to pay for that property. Keep costs under control by hiring independent contractors. If you’re looking to flip homes for a living, then establishing relations with professionals is vital; that’s because in time you will get a lot of discounts. Last but not least, get a real estate license to eliminate fees and commissions.
Always keep in mind that the market belongs to the buyer. Use that to your advantage. There are thousands of desperate sellers and distressed properties out there. Aside from decreased prices, a buyer’s major advantage is the willingness of the seller to seal the deal. This permits you to negotiate for the right price. There’s still a market competition though, so try not to make requests that are unreasonable. It might ruin your reputation!
Many professionals in the real estate business argue that, apart from location, it is fundamental to get your timing right. Flippers caught up in the 2005-2008 downturn will confirm this. Since certain investors have been evacuated others have been allowed in. Real estate investors with a perfect credit score or cash on-hand are invited to benefit from the most advantageous short sales, foreclosures, REOs, and seizures.
Investing in flippers can be extremely beneficial. However, before getting started make sure to assess the market. Get to know as much as possible about this form of property investment and don’t hesitate to ask for help when in doubt. It is surest way to succeed and make a profit.