Fix and flip real estate, commonly known as flipping houses, is an increasingly popular trend in the real estate sector. The reason is rehabbing properties can be a potential source of income if you know the right way to do it. It is not an easy process but learning a little more about house flipping might just be the motivation you need to try it out yourself.
House flipping refers to process of buying up real estate and quickly reselling it at a higher price a few weeks or a few months later. The technique is to find foreclosed homes or properties which are under-priced and whose values can be marked up after some work and renovations. Fix and flip real estate can normally be found at lower prices because of factors such as a divorce, the owner was laid off, or a death occurred in the household.
There are actually two common methods to flipping houses. The first involves purchasing a home and then reselling it at a profit without ever occupying the property. The other method of rehabbing properties is buying a property, renovating it and then reselling it for a profit.
Those new to rehabbing properties should be mindful of the work flipping houses involves. It starts with researching prices in the local markets to find foreclosed homes. Search for properties which need repair done. Try to develop a rapport with real estate agents who can let you in on any properties like this right away. Serious flippers even do direct-mail campaigns or place advertisements in local papers or on billboards.
Real estate investors can see huge profits from fix and flip real estate. There are several important factors to take into account, especially in setting the selling price. The common rule most people follow is a six percent realtor commission if you plan to sell the property through an agent. But if you can find foreclosed homes and sell it yourself, the better. It is also smart to consider any repair costs, time and labor you put into the process.
Property flippers look for foreclosed properties first. The banks who own them are often very interested in getting whatever they can for these homes.
Understanding the real estate market is crucial. You must be aware of what local home buyers are shopping for and then trying to find foreclosed homes they want. The best property flippers are the one who have buyers before they even purchase a property.