Is Flipping Houses Still a Profitable Investment Choice?

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Just a few years ago, flipping houses was one of the most well-liked investment options. Today, it is practically extinct, but some investors are continuing to generate profits in this specialized niche. It merely calls for a little resourcefulness.

Two methods for flipping houses still exist. The most prevalent entails purchasing real estate under current market value and selling quickly to generate profit. Investors usually look for distressed realty such as bank owned foreclosures and short sale properties. These kinds of houses generally need light renovations and repairs. Investors can choose to spend money for improvements or sell the realty in as-is condition.

The primary objective of house flipping is to quickly sell properties for profit. When repairs are needed, investors need to decide if they will hire contractors or make repairs on their own. Labor costs and required supplies need to be computed to figure out an adequate selling price.

Acquiring distressed real estate with the purpose of flipping for profit demands investors become educated about the process. Otherwise, investors will be stuck holding properties for a longer time and probably lose expected profits.

It is essential to buy properties in places where individuals want to reside. Investing in cheap homes located in crime-riddled neighborhoods will not provide opportunity for financial growth. Nor will this practice be as profitable as investing in properties located in safe communities with a high level of anticipated expansion. 

Novice investors frequently make the error of buying bank owned homes that need major repairs. Unless investors can make repairs on their own the expense of supplies and labor can drastically decrease profit margins.

While cheap real estate is appealing, these properties won’t necessarily provide the best return on investment. Most of the time they become money pits that cost investors more than the purchase price. This is not to say that discounted properties are not a bargain. Instead, it serves as warning that investors need to engage in due diligence and compute restoration costs prior to submitting an offer.

A less recognized, but more lucrative method of producing income via house flipping is to invest in wholesale real estate. This kind of realty is sold through wholesalers. Investors who are skilled in this niche market purchase houses in volume. Most often, they buy bank portfolios containing multiple bank owned homes.

Wholesale properties are generally sold around 30 to 40 percent below current market value. These types of houses can be rehabilitated or sold in as-is condition to people interested in buying fixer-upper houses.

Wholesale investors rarely engage in restoration or repairs. Instead, they marginally raise the price and sell to individuals or investors. While profits aren’t as significant as selling real estate in exceptional condition, investors don’t have to spend their own money to restore the property.

Flipping houses can become a profitable and rewarding enterprise for investors willing to learn the ropes. Considering the majority of distressed properties require maintenance it is sensible for investors to become educated about property repairs and refurbishments or build a community of contractors willing to carry out services at reduced rates.

Investors who do not desire the hands-on method should spend time investigating wholesaling techniques. It is not uncommon for wholesalers to sell off 20 or more houses each month. Even if they only produce 5 percent profit margins from every property they can still generate a hefty return on investment.

No matter the types of techniques used, flipping houses is a specialized niche that demands specific know-how. Investors that take time to understand the process can steer clear of pitfalls, minimize expenses, and develop a diverse investment portfolio.

A lot of investors think flipping houses is no longer a viable option. Those in the know realize profits can be generated in this niche by altering techniques. Discover how to succeed in this niche from California real estate investor, Simon Volkov at www.SimonVolkov.com.

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