To flip or not to flip?
It wasn’t that long ago that the word flip and talking about “flipping” a house was like saying a 4-letter word. Luckily, that is no longer the case. HGTV and even PBS have brought flipping homes into the mainstream of DIY and investments. Programs abound showing viewers the possible ways to DIY homes – from tearing out walls to plumbing, painting, cabinets, and more.
So what does flipping a home mean?
Simply put – flipping a home is taking a distressed property that has been purchased for a lower price, making upgrades, then selling it at a higher retail price.
So how do you flip a property?
“Distressed properties” can be obtained in many ways: short sales, auctions, and purchasing REO (bank-owned) properties. Properties usually end up in the distressed market because the previous homeowner has defaulted on their mortgage payments for a variety of reasons. The way out for some people is auction or short sale (usually taking less than the amount owed on the mortgage), or, unfortunately, foreclosure by the mortgaging company/bank.
Many times these properties have fallen into disrepair, or could simply use a facelift to make them more marketable. Investing in function, indoor aesthetics, and outdoor curb appeal can add value to the property above the initial investment and improvements, making flipping a profitable endeavor. Many factors will figure into the actual profit, including location, purchase price, cost of financing, quality of the upgrades, exterior upgrades (including landscaping), acreage, square footage, etc.
Thinking about flipping?
Is Levy Realtors & Associates can show you properties, give you some guidance, and help you make good decisions regarding the home(s) you purchase. We are networked with great contractors to help you bring the property to its best light. Contact us today to get started! Or attend one of our Get WIRED events to learn more about how to invest in real estate.