If you are considering or thinking about flipping houses to make money, you will need to first understand all the costs involved. Flipping houses is one of the best ways to make money in real estate, if done the right way .
The key to flipping properties for profit is that you need to include your profits into your expenses when deciding on your maximum purchase price. For example:
Market Value when fixed (repaired): $200k
- repair materials/labor cost: -$20k
- holding costs: -$5k
- agent selling fee: -$10k
- closing costs: -$1k
- profit: -$20k
- fudge factor: -$5k
Maximum purchase price: $139k
Seems like a large spread between $200k and $139k, but note that houses that are worth $200k in mint condition are typically listed for much less when they need extensive repairs.
Can you still make money flipping houses? Absolutely! There is no question that we are in a different environment than we were just a few years ago. You could be as dumb as a rock in 2005 and still make money flipping a house. It was a can’t-miss enterprise. Not so today! Real estate values have tumbled and houses sometimes take longer to sell. But we firmly believe that there is still a lot of money to be made for many years to come. HomeWork can help you make this a reality.
Here is some sound advice:
- If the profit margin is too low, you might be taking a risk as you would not want to have negative cash flow.
- Prefer houses which are in a good neighborhood and avoid the ones which require structural repairs.
- Get the property inspected before buying it. This way you will know of any money you may have to invest before you can flip the house.
- One of the most important factors in flipping a home is to plan the flip according to needs of the location rather than your own desires and choices.
- And finally, do not get emotionally connected to the property.
HomeWork staff, employees and professional team, can relieve the stress of flipping houses. Our focus is to meet the demands required of us to keep your investment our priority.