What to Consider Before Flipping A House

by William Fear 10/06/2019

You can make money by investing in real estate. One way you can do this is by flipping houses. Flipping a property refers to when you buy a house to sell it for profit. The purchase is a short-term investment that requires much planning as it could be quite dicey. Buying a home to sell is a great way to make money, but it requires skill, careful consideration, research, and sometimes pure luck. No matter what kind of property you decide to invest in, there are many things to consider when you are getting ready to start flipping houses.

There are two main types of house flipping:

- A real estate investor purchases a house that could potentially increase in value if repaired and updated. After completing the renovation, the investor makes money from selling the home for a higher price than the total cost of the purchase and improvements.

- A real estate investor identifies an undervalued property in the market in a neighborhood with fast-rising home values and holds the property for some time until the house has a higher value. They then resell the house profitably.

Common types of property to flip

- Single-family houses: These are the most common types of homes to flip. These include bungalows, semi-detached houses, townhouses, and freestanding homes. They are the easiest to buy and sell as they are most readily available.>

- Multi-family residences: You can renovate the existing units or add more units to the property to make it more attractive to buyers.

- Retail properties: You can buy a property and restore it to make it suitable for specific use as a restaurant, bar, or store.

- Land: This is the most difficult as there are more processes involved and building on a new property is more expensive than renovating an existing one.

Benefits of house flipping

- You have a significant level of control over many elements of the project through research and analysis

- You can flip any house as long as it fits your needs and requirements.

- The team you hire can significantly influence the success of your flips like an experienced real estate agent, an interior decorator, and a reputable contractor.

Disadvantages of house flipping

- You might lose your money if you don't get all the expenses right or you run into unexpected costs

- Sometimes you have to pay capital gains taxes when you sell a house.

- You may end up spending more than you should on a home if you misjudge the neighborhood.

If you are looking to start investing in real estate, flipping houses is a great way to start. Speak to a real estate agent and an experienced contractor to begin.

About the Author
Author

William Fear

Residential, Commercial and Investment Real Estate

Bill Fear has been a licensed in Michigan as a full time Realty Broker for over 25 years. He brings extensive knowledge to finalize the entire real estate transaction simply because of his experience in all phases of the transaction. His related experience comprised of: working as an Appraiser, Loan Officer, Property Manager, Investment Property Analyst. He is Nationally Certified as a Buyer and Tenant Representative, Senior Real Estate Representative, and a Negotiation Expert. Among his numerous Realtor designations, he is the recipient of the prestigious University of Michigan Alumni Realtor (RAM) designation, that encompassed the following diciplines: Real Property Law - Residential Construction & Development - General Business - Marketing - Taxation - Accounting - Computer Skills - Economics - Communications - Finance.

Bill’s success is attributed to is his genuine concern for helping people. His patience, determination, and strong work ethic has helped him grow a business that is highly referred-based.

Besides being recognized by the National Association of Realtor and the Michigan Commercial Board of Realtors, Bill also holds designations as a Short Sale Foreclosure Resource, Senior Real Estate Specialist, and an E-commerce participant, and is Nationally certified as a Negotiation Expert. As Graduate of the Real-estate Institute, he holds the GRI Realtor impressive designation, certifying competence in Construction, Property Law, Negotiations, and Investment Analyst. He is a candidate for the Certified Commercial Investment Member (CCIM) designation from the National Association of Realtors.

“I’d like to think of ourselves as a company people want to work with. They WANT to buy from us. We don’t sell to people…people buy from us. We provide a service. And we’re compensated for what we provide personal and professional development increases my ability to give more, by helping enough people get what they want.”