Some driven entrepreneurs don’t just buy ready-to-move into homes and sell them to homebuyers. Those entrepreneurs look at rundown, low-value homes and see the potential waiting within. These unique individuals practice the art of house flipping.
Not sure what house flipping is, whether it’s profitable, or how to get into this arena yourself? Read on to learn everything you need about house flipping in detail!
What is House Flipping?
In a nutshell, house flipping means purchasing a house cheap, whether because it needs a lot of work or because no one wants it for another reason, then improving it and flipping it to sell at a higher price.
Imagine that you find a run-down house available for $200,000. It needs a lot of work, but over two years, you improve the house and spend about $20,000 on renovations.
Due to the improvements, you list the property for $300,000 instead. You’ve just flipped the house, and if you manage to sell it, you’ll make a profit of $80,000.
What Houses Are Best for Flipping?
You can’t just flip any house. Some houses are much better for flipping than others. Understanding which homes are prime for flipping takes a bit of experience, but in general, good house-flipping properties are:
- Run-down or in bad condition in some way. For example, maybe they have terrible front yards or bad curb appeal or need a lot of repair work in paint, doors, windows, etc.
- In bad neighborhoods or areas, which make them less desirable to prospective homebuyers
- Homes that haven’t been kept up or modernized over time. Think homes built in the 60s or 70s that haven’t had their appliances replaced since then for one reason or another
Note that a home that’s practically a piece of junk or that needs a lot of foundation work isn’t a good choice for flipping. It’ll likely cost you more to repair or improve the house than you’ll make when you finally have it ready to sell.
Above all else, a good house for flipping is one that you can improve using your elbow grease and a bit of cash, then turn around and sell for a profit. Think of good house flipping homes as properties that you can improve yourself or with the help of a small team of contractors for a significant price difference.
Of course, some people know that their houses aren’t worth much. Once you build up a reputation in the house-flipping industry, your friends and family members may call you to ask, “Can you sell my home?” If you get an offer like this, take it (while offering them a fair price, of course).
Don’t look a gift horse in the mouth. If you get a great deal on a fixer-upper, purchase it quickly before someone else does, then fix it up and sell the home for a massive profit.
Is House Flipping Profitable?
House flipping can be profitable, but only if you choose suitable properties to fix up and have the patience and knowledge to make it work. You either have to make the improvements for house flipping by yourself or hire knowledgeable contractors, which can eat into your bottom line and the potential profits you may receive.
Is House Flipping Hard?
Yes, no matter how you cut it. Even if you hire contractors, house flipping is usually tricky as you search for properties, find the right contractors, and put in work orders to ensure the properties are improved correctly.
On top of that, house flipping takes a lot of time, even in the best circumstances. You’ll want to plan for at least a year between purchasing a property and putting it back on the market for the best results. House flipping is not a get-rich-quick scheme at all.
Can You House Flip By Yourself?
You can house flip by yourself, but it’s often better to do so with a team or at least a partner to help with the renovations and house-hunting steps of the process. House flipping by yourself is a lot of pressure. If you have to work a day job before you earn enough income from this activity, you’ll be working 10 or 12-hour days at a minimum.
If you have the funds to focus exclusively on house flipping, it’s much easier to do by yourself. But it’s still tricky no matter what houses you can find!
House flipping is an art in and of itself. With enough practice and drive, you can make a major profit flipping houses, plus learn more about the real estate market than you did before. Consider looking for a property to scoop up and flip today using the advice above!
