Doghouse to Dollhouse for Dollars Real Estate Investing Information

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Flipping Houses: First Question to Ask Yourself

How Much Profit? Before you even begin thinking about flipping a house, you need to think about what it will eventually sell for. That means doing your homework long before you make an offer on any house that you're hoping to flip. Study comparable properties that have sold recently--up to six months ago, preferably as close to your target house as possible. (Homes in the same neighborhood are good; homes on the same street are best.) When you've found comparable properties, go and see them, at least from the street. You want to know how comparable they really are, which may be quite different from how they appeared on a computer print-out. Nothing beats actually seeing them yourself. Your object is to look at your flip house the same way potential buyers will. They'll be comparing your house to all the others in the neighborhood vicinity before making a decision. Of course, the amount of money you'll need to spend to fix up your house before flipping it will vary according to the amount of work you'll be able to do yourself and the cost of subcontractors to do the work you're not capable of doing. This is where some experience comes in, because in a fast-moving market, you often won't have the time to receive bids from various contractors before writing an offer on a flip house. It's not an exact science, but once you've gotten a few houses under your belt, you'll have a better feel for what your fix-up costs will be. Also remember that there will always be unexpected, and often expensive, surprises along the way. It pays to work with certain title and escrow companies on a regular basis, in order to get a feel for what their costs will be, so you can figure those fees into your costs. The same goes for an attorney and a mortgage company. Often, those professionals will begin to do you favors after you prove that you're a steady, reliable customer. And those favors can sometimes prove to be the difference between a profitable flip and a disaster, BEFORE you make a costly mistake. Your final decision is determining how much you want to make on any given flip. That's partly a matter of preference, but it's also dictated by the market. There are some markets in which fixer-uppers are only slightly less expensive than nice homes in the same area. Every part of the country differs, and there can be vast differences within the same town, so you'll have to do your homework there, as well. All those calculations won't give you the price you should pay for a property. The whole point of doing all the analysis and research is to determine the MAXIMUM amount you're willing to pay for a house you're going to flip. Once you've determined that figure, stick to it, and if the seller won't match it, walk away and look for another house. It'll be hard, but it'll stop you from making a mistake that could be devastating to your bottom line. Beginning Real Estate Investor's Mistake One mistake beginning real estate investors make is spending too much time looking at ONE home. They get friendly with the seller and want to help the home owner. Spending too much time in a home makes you feel connected to the house. You start to envision all the changes you could make to improve the home. It becomes a challenge to take an ugly house and turn it into a dream home instead of just a money-making venture. Don't be tempted to buy any house. Remember your first question: how much can you sell the home for compared to all of your costs? Select from the many fixers waiting for your magic touch. Select the one you know contains a hidden pot of gold. Copyright © 2006 Jeanette J. Fisher Jeanette Fisher offers FREE "How to Start Real Estate Investing Teleseminar," free ebook, "The Truth about Making Money Flipping Houses." Ever wonder how those multimillionaire real estate investors got started? You might be surprised at how easy it is to buy your first investment property! Are you willing to follow four proven steps to make money investing in real estate? Fixing and Flipping Houses   Real Estate Bubble in Southern California?   Real Estate Investing Business Plan Get all the tools you need to start your real estate investing business.

Free! 3 Real Estate Investing Teleseminars How to get started investing in real estate  Teleseminar Free "The Truth about Making Money Flipping Houses ebook with newsletter Doghouse to Dollars  Newsletter   Name Email

"Many investors fix-up houses for profit, but not like Jeanette!" -April Strickland, Realtor, Orange County, California

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