You’ve probably heard the term “flipping a home”, but what does it mean exactly? Basically, flipping a home is the process of buying a home that perhaps needs some Tender Loving Care, giving it that TLC and then selling it at a profit. Sounds easy, right? Well, it is easy, but it’s not guaranteed.
First, you must locate the right house for flipping. Maybe it’s the most run-down home in a great neighborhood. Maybe the home needs major renovation but the price is a steal. Whatever the reason for its lower price, the bottom line is that the home must have a great deal of potential. It’s up to you to realize that potential by bringing the house to a livable, sellable state.
Having handyman skills will help you flip the house with a minimal investment of money. Many “flippers” are people who enjoy home improvement projects anyway and have managed to turn their “hobby” into a lucrative business. Even if you’re not ready to quit your job, home flipping can still be a weekend project that makes you large sums of money. If you’re not great with your hands, you can still make money flipping homes, but you’ll have to pay for the improvement services, thereby reducing your profit.
However, that being said, there are no guarantees in home flipping. One of the biggest risks of flipping a home is that it won’t flip – no one will buy it. In this case, you’re basically stuck with the home. Sure, you can leave it on the market, but if it doesn’t sell now, it probably won’t any time soon unless you sweeten the deal by lowering your asking price. At these times, some flippers become landlords by renting out the property until the market will bear their asking price.
Sometimes, though, you just have to bite the bullet and lower your price. You might have had a target price in mind, one at which you wouldn’t settle for less, but is it better to take a $3000 loss or sit on a property for seven years? This is a decision that can only be made by you, but it may be better to sell the house for less and move on to the next project – some houses just won’t sell above a certain number.
Make no mistake, there is a great risk in home flipping, but there’s also great reward. Lots of money can be made flipping homes, just be sure you know the risks and have planned for contingencies before you make the initial purchase. Planning is everything and can make or break most any real estate deal. Be prepared.
Jim Miller is a full time full service licensed Realtor® in the Southern New Hampshire area with Coldwell Banker Residential Brokerage and has many years of experience buying and selling New Hampshire Real Estate .
Contact Jim direct at 603-801-3987.Back to the Home Buying Tips page
Home Buying Tips