What is a flip? This video is on flipping houses 101 which will give you the basics of what you should consider if you are getting ready to fix and flip or if you think real estate flipping is in your future.
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What is a flip? A flip in real estate is purchasing a home at a discount with the intent of fixing it up to sell for a profit in a short period of time.
Flipping homes 101
A flip can be done in almost any market but the idea is finding a property that is undervalued in its current condition with the potential of fixing it up so that you can sell it for a profit but keep in mind that flipping homes is a risky business.
Things to consider when learning how to get started flipping houses
1. What is the home worth is its current condition?
2. What is the upside potential of the home once it’s been fixed up?
3. How much money is it going to cost you to fix the property?
4. Do you have someone that is going to manage the project for you or are you doing the work?
5. How much money is it going to cost you per month while you fix the home and while it’s on the market to sell?
6. Are you factoring in realtor fees, closing costs, etc…..to your net profit when determining your upside?
7. Have you thought about taxes on your gains? Profit from flipping homes is treated as ordinary income and can’t be rolled over using a 1031
As a Realtor, I see a lot of flipped houses and the majority of them are done very poorly. There are corners cut, the craftsmanship is shabby and often times the work is done without permits, etc……The reason for this is every investor is looking to make as much profit as possible and therefore the majority of flippers out there are looking to do the least amount of work to net the most amount of money. While this should be the goal, I often see these homes sitting on the market for an extended period of time because of the quality of work that was completed. The reason I bring this up is because if you are considering flipping homes, you need to factor in a realistic profit so that you aren’t one of these investors over-pricing the home with shabby work and having the home sit on the market.
Keep in mind that the flipping market is a very competitive market and oftentimes you will be competing against investors with cash making it difficult to compete on a level playing field.
Are you considering property flipping or buying a flipped property and have questions? If so, please comment below or contact me directly as I’d love the opportunity to help.
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Other videos you might find helpful:
January 2020 Real Estate Market Report – https://youtu.be/q4jimRTogiM
Housing Market Predictions 2020 – https://youtu.be/fyfdSr66mj4
California Rent Control – https://youtu.be/PUnNTgWlvLk
#1 TIP to get the MOST MONEY for your HOME – https://youtu.be/lhvmQ34MOro
Appraisal vs Home Inspection – What’s the Difference? – https://youtu.be/cwjokWbr1Go