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:

Comments

Post a Comment

Popular posts from this blog

Home Buying Tip: How To Save Up For A House

Are you thinking about buying a home and just don’t know where to start? Before you even begin looking at homes, consider how much you may need to save to make the process as smooth as possible for you, especially in the long run. While there are situations where you don’t need a large down payment for a home, having one can save you money down the road.  Saving for a down payment is slightly different than other large savings, like retirement. With those savings, you can set aside smaller amounts or invest the money. Because you will need your down payment sooner rather than later, those saving methods won’t be beneficial to you. Here are some steps to take to save up for your dream home! 1. Determine How Much You Need There is a general rule of thumb in real estate, the rule of 28, that says your maximum mortgage payment should not exceed 28% of your gross monthly income. Sitting down with a mortgage lender will help you find out how much of a mortgage you qualify for ba...
Post a Comment
Read more

Real Estate Advisor: March 2019: Selling And Buying At The Same Time

Buying a home is exciting whether it’s your first home or your fifth. But while buying a home can be a real adventure, many owners put their home on the market while trying to find a new house. As a homeowner, you can try to sell while looking for something new, but it can get a little tricky. Read on for tips on how to make this process as smooth as possible. EVALUATE YOUR LOCAL MARKET It would seem like selling your home before putting an offer on a different one would be the best option when it comes to buying/selling, but it can really depend on the local real estate market. If you have the time, research the market in your city or desired area. This will let you know whether it’s a buyer or seller market. The type of real estate market in your locale can really dictate whether or not the process will be quick or drawn out. The general rule of thumb is to sell first in a buyer’s market, and buy first in a seller’s market; but this isn’t always the case since every ...
Post a Comment
Read more

Real Estate Advisor: February 2019: Key Questions For Owners Thinking Of Selling

Taking the plunge and listing can be an exhilarating decision, but doing so without asking yourself some  important questions could leave you scrambling to figure out what you're going to do should your home be a highly sought-after property. If you're toying with the idea of listing, ask yourself the questions below before you make your final decision.    HOW MUCH IS MY HOME WORTH? Unless you consistently check real estate prices in your area or are comparing comparable homes in your neighborhood, it's likely you may not know the true value of your home. If you're thinking of selling, it's important to find out how much your home is worth. If you are dreaming of a new neighborhood, with the hopes that you'll make a good amount of money off your current residence, do your due diligence and ensure your home is worth what you think. The last thing you want is to find out your home is worth less than you thought and your dream neighborhoo...
Post a Comment
Read more