Flipping Properties For Fun And Profit

There's nothing more satisfying or rewarding than making more money than you can ever possibly spend particularly when you can take it from others

. That's called "winning" in the new American economy, and flipping houses is one good way to make sure that you're among the "winners" and not the "losers." However, you should be aware that house flipping can be a bit more complicated than simply rehabbing properties in need of repair then turning around and selling them for a quick profit.

All About Flipping Properties

There are two primary methods when it comes to flipping properties; one is to buy "distressed" or foreclosed properties. You can get some good deals, but they're likely to cost more which means less profit for you at the end of the day.

Rehabbing properties that are run down and in need of repair is usually a more profitable option, particularly if you have good construction skills and can do most of the work yourself. With such "sweat equity" and a source of discount building supplies and materials, you should be able to realize a substantial profit by rehabbing houses in need of repair as a house flipping strategy.

Another Thing To Keep In Mind

Of course, there have always been whiners in every society who are not as savvy as people like you. Such people have been unable to adapt to new economic realities and in some cases have gone to their city governments and convinced legislators to pass laws to prevent smart investors from taking advantage of current conditions. These ordinances require a home buyer to live in a house for a certain amount of time, generally six months to a year, before re-selling it. The purpose of course is to discourage the practice of flipping properties, since this has had a tendency to inflate housing prices. However, chances are good that if you are into rehabbing properties, it will take you take you at least that long to get the home ready for the marketplace so unless you are trying to do quick foreclosure flips, this should not be an issue for you.

Getting Financing

Very few people who get started flipping houses have the financial wherewithal to pay for such investments up front in the beginning. Whether foreclosure flipping or rehabbing houses, you'll probably wind up getting a very short-term mortgage. Be prepared to put down 5-10% if you want the most favorable terms, which are likely to be less favorable than a 15 or 30-year loan. When rehabbing houses, you'll have to figure these payments into your investment costs along with construction and renovation costs.

As you can see, rehabbing properties is a bit more involved than just picking up an old house and turning it around for a quick profit. Nonetheless, done methodically and with a serious plan in place, rehabbing properties can be an ideal way to build financial security and wealth for yourself.

by: Wayne Hemrick

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