Right after the 2005 peak of fix and flip houses and the 2008 financial crisis, the fixer upper market went a bit silent, most people were into different type of investment that could create a potential cash flow, such as Hold and Rent distressed, auction and foreclosure properties, however everything changed alongside the market as the prices started to rise once again all over the place, that’s when fixer upper houses became a hit, and now it’s back to take its throne.
What changed, you may ask? Besides the prices going up, builders have stop building new structures as they became too expensive for buyers so the ROI wasn’t getting any better on that, so they have starter branching out to old properties that need some things redone, which is way less expensive and most of them are in an area that could bring up potential profit without too much fuss.
Granted some of the properties that are flipped don’t appeal to new homebuyers because sometimes the changes in it are far too expensive and don’t necessarily work out with their mortgage loan, but! Tons and tons of investors are now taking it upon themselves to purchase said properties to fix them and turn them into properties other buyers might have an interest on. But how do they do it?! It depends on the property and the profit they wish to obtain, some of them just purchase the property fix it and sell it right away, other buy it, hold them for a bit while renting them while the market value rises, and sell them getting a far bigger profit.
The beauty of this technique is in the possibility of profiting from a small investment, as in average, a flipper will get around $60k per house in an up and coming market, but don’t get too caught up on that! Learn how to negotiate if you’re just starting, don’t let them undermined you and make you pay over the market price, and lose money after the repair and selling.
If you want to adventure into the business of flipping, we recommend a few tips:
- Don’t let the seller undermine you! They will try to make you pay far too much and lose money after you try to sell it.
- Ask someone who is involved in the business already for advice, they know the average price of things and how to get the best profit.
- Learn about the current market in the area you’re interested in and see if you can get a good profit by checking the comps!
- Use other types of investments as well! Don’t get too attached to flipping as your only real estate resource, try different things because no one knows how long this peak is going to last!
- Don’t be scare of taking risks! Try your hand on fixing the property but if you can’t do it, ask for an expert!
Flipping is a great technique in today’s market, is smart, quick and sometimes easy way to earn money, you just need a bit of strength, patience and luck! Here in IRG Corporation we do them as often as we can! Fixing a property to put it for sale, or rent it is what we do most and what we enjoy doing, it creates a whole new place for people to live their life and future, as well as continue building and growing our company. If you want to join us in this, let us know! We’re always open to working with new people to expand our horizons.
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