The Basics Of Flipping Real Estate And Property
Posted by Lisa Udy | Posted in General Advice | Posted on 20-08-2010
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Real estate is, let’s be honest, one of the only investments you can trust anymore. Sure, there are always ups and downs. A house you spend so much money on today might be worth half as much a year from now, but, it will eventually improve in value, and it will ALWAYS be worth something. That said, you still want to know how to make the most of your investment. Here are some of the basics when it comes to turning a home into a profit.
Buy Low
This one should be obvious, but so many people neglect it. If you’re buying a million dollar property in a gated community, you’re probably not going to make much of a profit. You might be able to fix it up a bit and turn, say, five percent on the purchase price, but you better keep the repair costs down. Basically, the lower you start, the less you spend up front, the bigger your profit will be. It’s easy to turn a dirt cheap house into a modestly priced home worth two, three times what you spent on it, but doing this with a home that’s already on the top of the market? Forget it. Buy cheap.
Sell it High
Another obvious step that many new investors just plain neglect! It’s ridiculous that so many real estate investors ignore these two crucial steps, as they are the basic concept of business: BUY LOW, SELL HIGH. You want to make as much profit as possible on each property you sell. This means that you can’t be content to, say, buy homes when the market is weak and sell when it’s strong. That’s profit, but it’s marginal. What you want to do is buy those beat up places you could have for a song, and then turn them into something that will sell well in ANY market. Take something of low value and turn it into something of high value. This is the core of smart business.
Control the Budget
Probably the biggest pitfall for new home investors: They spend so much hiring crews, architects, designers and so on, that by the time they make the sale, there’s little left over to put into the next investment, if they can afford to pay their contractors and stay out of trouble in the first place, that is. Whenever you can, do the work yourself. Look, most of these homes require a few month’s of work and the kind of repair budget you could earn at a minimum wage job in the same amount of time, so why spend ten, twenty times that much hiring a professional crew? Live in the house as you fix it up and it’s all profit, really, since you’re only collecting the final price for repairing your own home!
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categories: Flipping Real Estate,Real Estate,Business,Finance,Sales,Investing,Investment,articles,information,mortgage,advice,general,homes,Home Family
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