Flipping Houses for Profit

You’ve got excellent credit, lots of free time, and a huge hunk of cash or home equity saved up. So what can you invest in that will make you a huge return? The housing market is a great place to start, but if you want to make the real money in real estate, then you are not looking at buying a house and selling it right away. It is going to take some changes to that property to make it sell for some real money and make it worth the expenses in closing costs and time.

So what kind of home do you want to find? One in a good neighborhood that is otherwise in need of a little love. Whether it has zero curb appeal or just needs a little update, you can spend your time and money turning a house from blah into beautiful and sell it for many times the investment that you put into it in the first place. In some cases you are making tens of thousands of dollars for a couple of months of work, and in other cases you might be able to make hundreds of thousands of dollars by spicing up a home that was in true need of a little improvement.

What to look for

You are looking for a home that could use some updating, but not necessarily a fixer upper. You also need to keep in mind that buying the most expensive house that you can afford will seriously limit your budget for actually working on the house. Buy a house that is well within your comfort levels and focus on bringing the value of the house up as high as it will go instead of worrying about buying the best from the outset.

Have a goal in mind

Imagine the changes that you want to make to the home before you buy it, and check things out to see that they are within the budget that you have allotted yourself. Do you want to tear out a wall to make the kitchen bigger? Replace the flooring? Redo the landscaping? Update the lighting fixtures? Put in new windows? Install a sliding glass door in place of an old window? All of these things can improve the sale price of the house, but they can also be costly or difficult to put in.

If you are doing the work yourself, you also want to have an idea of your own abilities, and be able to honestly assess whether you can perform the flip yourself, or whether you will need help. You may need to scale back on the update designs if you find that you are going far over your budget.

Make a budget, but have extra

No matter how sure you are that you will not go over budget, no one can predict some of the sometimes expensive things that can happen when you are working on home repairs. Be prepared for the worst by making a budget that does not stretch your purse strings too tightly. That way if you drop a few pieces of the new kitchen tile, you can afford to replace them without going into the red. Keep in mind that you will also have to think about other things such as food while you are flipping the house. You are not going to have the time or energy to cook dinner for yourself, much less to leave the job site to cook yourself lunch. Unless you are planning to bag a lunch every day, remember to include things like lunches and a portable toilet if you are remodeling the bathrooms.

Stick to your plan

Once you see how nice the tile looks on the kitchen counters, you may be tempted to do extra work to improve the look of the home even more. If it is not necessary, however, and it was not on the original plan, scrap the idea or save it for the next flip. One of the fastest ways to go over budget is to start adding projects when you are already well into the remodel. Your original plan should be enough to increase the sale price substantially all by itself without the need to go overboard.

Talk to a real estate agent about your plan

Real estate agents in the area will be able to help you find a great house for flipping. They will also be able to tell you what improvements would be the best for your particular area. You might think that a kitchen remodel is the best thing for the house, but there are some areas where air conditioning is worth a king’s ransom. Matching the needs of the area to the design of the house will help you maximize your profit in this venture.

Be prepared

No matter how ready you think you are, there will be little things that go wrong that might delay your flip or cost you extra money. Expect the unexpected from this new house of yours, and get ready for the job of a lifetime. A couple of months of hard work can easily bring you financial rewards that will last you the whole year long if you choose.

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