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.



Comments

Popular posts from this blog

Tips To Beautify Rooms In Your Home

There’s no place like home, so why not make home the most beautiful and cozy place you can stay in? Let’s dive into some techniques that can help you showcase the best features of every room in your house. Just a touch of color, texture, and personality can transform your home into something new. Here are a few tips that aren’t a lot of hassle:     ADD SOME COLOR Going with a neutral scheme can never go wrong, but if you’re feeling like your room is a little drab, don’t be afraid to go with a bold color. You can do an accent wall that compliments the current color scheme or use your furniture or accent pieces to bring a touch of color. Color doesn’t have to mean clutter, you can keep the rest of the room simple and add the dramatic touch with a few elements.   USE SOME MIRRORS Bringing in some mirrors can add light and room to your space. Using mirrors in staging is known to help the room look like it’s much bigger than it is it. Add a few accent mirrors, pre...

Feng Shui Color Meanings for Home Design

RED:   Acts as a stimulator ORANGE:   Uplifting color that promotes happiness YELLOW/GOLD:  Symbolizes power, stimulates health, patience & wisdom PINK:   Represents love, romance & partnership GREEN:   Represents growth and new beginnings, as well as healing & freshness BLUE-GREENS:   Represents youth, new beginnings & inspires confidence DEEPER BLUES:   Infuses wisdom & introspection PURPLE:   Inspires spirituality, adventure & prosperity BLACK:   Contemplative color that encourages reflection & mystery WHITE:  Cultivates clarity, precision & communication GRAY:   Invites helpfulness and represents a harmonious union of black & white BROWN:  Offers stability & security Room color can influence our moods and our thoughts. This is why it...

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...