House-Flipping Tips

by Tracey Lizza 01/12/2020

Image by Andy Dean Photography from Shutterstock

In past housing markets, it was common for investors to flip houses. Unfortunately, when the housing bubble burst, many buyers couldn't update and sell the homes they'd bought. After a bit of a downturn, the trend has picked back up. However, savvy investors know that the housing market has much tighter margins than it has in the past. If you’re thinking about getting into the house-flipping game, consider the following tips as you get started.

Here are some tips to protect your potential investment:

  • Not every housing market is profitable: Many homes can be purchased, renovated, and potentially sold in every part of the country. But some locations do not have the sort of economic growth that makes property flipping viable. Know your market and local property values. Keep in touch with what’s happening in the community and be prepared with a plan B in case the home doesn’t sell.

  • Do your homework. There are fewer deeply discounted homes available to investors. Plan to pay the full price in cash but arrange a contingency to have the home inspected. If the inspection reveals issues, especially with primary systems such as electrical and plumbing, walk away. Or, offer the seller a lower price to account for needed repairs, and potentially get a better deal. Anything revealed during the inspection that the seller did not fix your responsibility to repair or replace before you can flip the property.

  • Respect your margins. Unlike in reality shows the profit made from buying and selling a home is not as large as it appears. When you find undervalued homes, you need a cushion built-in for the rehab. If the difference between what you paid and the new selling price is insignificant, it’s not a sound investment. Avoid purchasing property that requires thousands of dollars of repairs or upgrades. You'll end up with a lovely home, but little to no income to show from it.

  • Constantly monitor the inventory. Fewer homes on the market mean finding one with flip potential is more difficult. 

Seek help from a professional

Maintain a close relationship with your real estate professional so that when potential homes come on the market, you’re the first to hear. Your real estate professionals know the local market. They watch the trends and know who is buying, who is selling, and who is holding. They also know which repairs and upgrades are essential to make a quick sale. Let them guide you.

About the Author
Author

Tracey Lizza

Buying or selling a home is more than just a transaction: it’s a life-changing experience. Tracey is dedicated to providing exceptional, personalized service with total discretion for all of her clients. She takes great pride in the relationships she builds and always works relentlessly on the client’s behalf to help them achieve their real estate goals. Tracey places a high value on responsiveness and availability. She works with her clients every step of the way whether they are buying, renting or selling. A career as a real estate professional has been a perfect fit for Tracey. She has had a varied background in the marketing communications field including having worked in the international fashion industry as a buyer. Combining a personal selection of residential and commercial properties, Tracey brings her expertise along with firsthand experience. Tracey and her family enjoy the Shoreline lifestyle of Southeastern Connecticut and have garnered great pleasure volunteering and being active in her community and children’s schools. Tracey interests include gardening, boating, and horseback riding, Contact Tracey and let her help you move in the right direction!