Skip to main content

What's The Deal With Flipped Homes?

Americans love their home improvement and design shows. With entire channels dedicated to DIY, home decor and design, and everything related to U.S. real estate, we love the possibilities that lie within the real estate market in America. One popular aspect of many shows and publications is home or house flipping. We hear a lot about flipping homes, but what does that really mean? Is it feasible for everyone? Are there risks? Should you buy a flipped home, and what questions should you ask if your property search lands on a potentially flipped property?

What is Flipping?

Flipping is a predominately U.S. term used to describe purchasing a property with the intent of quickly reselling it for profit. Most of the time, properties that are purchased with the intent to flip are those that are distressed, abandoned, or otherwise in need of repairs that make the property less desirable to other potential buyers. Flipping has become increasingly popular throughout the U.S. in the last decade, and many people have become successful real estate flippers with the vast and varied real estate markets throughout the United States.

Can Anyone Flip a Property?

Many programs on television make house flipping look easily attainable to anyone and everyone. The fact remains that flipping a property is risky business that requires a large amount of work, experience, funding (preferably cash), excellent credit and a good understanding and almost intuitive knowledge of the real estate market. If you're interested in flipping properties, the best way to get started is by talking to someone who has experience and has had success in flipping real estate. There are many things to know about flipping real estate that should be addressed before the idea is even entertained.

What are the Risks of Flipping a Home?

There are risks with any kind of real estate investment, but inexperienced flippers can make a number of mistakes. There are a number of costs that come with flipping a property, and new flippers can make the mistake of not having enough money to cover the entire project – from the acquisition of the property, to the renovations, taxes, utilities and more. Another risk of flipping properties is time, or lack of time. Finding the right property can take months, and once you own the property there is a time commitment to renovations, commuting, inspections, and ultimately the marketing and selling of the property.

 Other risks that new flippers run into are not having enough knowledge about the real estate market and failing to purchase the right property for a flip; a lack of skills when it comes to working on the property and putting in the sweat equity (hard work) required to get it up to market standards; and ultimately lacking patience when it comes to the entire project as a whole.

Should I Buy a Flipped Home?

Often, flipped homes have mostly cosmetic changes done in order to attract buyers and ultimately get the property sold. You might fall in love with fresh paint and brand new appliances, and generally speaking, most flipped homes attract many buyers because they have a smaller initial to-do list than other properties on the market. If you're looking at a property that could be a flip, be sure to ask these questions: What is the home's sale history? If the home recently sold for much less than its current asking price, it's possible it is a flip. Does the outside of the home match what's inside? If the exterior of the home is older, and the interior looks brand new, it's very possible someone is trying to flip the property. Information is your best friend when it comes to a flipped home, so getting the most information up front will help guide you toward pursuing the property or not. 

 If you believe you're looking at a flipped home, consider asking the seller what changes have been made to the property, and check to see if any permits were issued for the work. Also, some buyers might be blinded by all the new interior cosmetic updates that they forget about the bones and foundation of the home. Regardless of whether a home is old or new, always hire an experienced and licensed inspector to check over the home to make sure you're getting the most for your money when it comes to buying a property.

Labels

Labels:

Comments

Post a Comment

Popular posts from this blog

Real Estate Advisor: January 2019: A New Year Checklist For Your Home

If you’re looking to start a-new this coming year, why not have a checklist of things you can do for your home to give it a fresh start to 2019? There’s nothing better than a clean home, and it’s a great way to begin a brand new year. Start With The Little Things Many of us, whether we rent or own, tend to overlook the little things. But even the little things can make a huge impact on our homes. Add these to your home’s new year checklist: Check batteries on fire/smoke detectors and carbon monoxide detectors. We hate hearing the chirp of a dying smoke detector in the middle of the night - be proactive and change out all the batteries now! Clean your clothes dryer. Vacuum out lint from the dryer vent. Too much lint can be a fire hazard if it’s accumulated over time. Also, if you have too much lint build up, your dryer may not even work at maximum power. Clean vents and registers. Things can get stuck in and even build up in your home’s vents and registers. Wipe...
Post a Comment
Read more

Ideas To Help Reorganize Your Kitchen

The kitchen, for most of us, is the heart of the home. In fact, as the epicenter of the home, the kitchen is one of the most important rooms when it comes to the resale value of your home. However, for many homeowners, the kitchen can also be characterized by clutter, crowded cabinets, and general disarray. If you've been trying to find ways to reorganize your kitchen without a costly remodel, here are a few quick ideas. Repack Dry Goods :   Most packaged food products can be more space efficient when removed from their original packaging and placed in stackable plastic containers. Free The Spices :   Don't waste cabinet or drawer space on your spice collection. Spices should be handy near the stove, so install a wall rack in a convenient location. Be careful to avoid spots that will get too much heat, as this can affect the flavor of some spices. Hang Them Up :   Hanging pot racks can both free up your cabinet space and add a chef's touch to your ...
Post a Comment
Read more

Boomerang Buyers Entering The Market

TransUnion  recently released the results of a new study titled  “ The Bubble, the Burst and Now - What Happened to the Consumer? ”  The study revealed that 1.5 million homeowners that were negatively impacted by the housing crisis could re-enter the housing market in the next three years. TransUnion  defined “negatively impacted” as… “…those who were 60+ days past due on a mortgage loan, lost their mortgage through foreclosure, short sale or other non-satisfactory closure, or had a mortgage loan modification between the Bubble and Burst.” Other interesting findings in the study: During the mortgage bubble in 2006, 78 million consumers, or 43% of credit-active consumers in the U.S., had a mortgage More than 8% of these consumers were “impacted” 5 Million consumers will again be eligible for a mortgage in the next four years Here are the numbers of consumers who will meet mortgage guidelines over the next four years: Bottom Line If you a...
Post a Comment
Read more