How to Flip a House
How to flip a house in any economy maintains basic fundamental practices. Provided you have the cash or access to bank financing.
1) Buy Low
2) Add Value
3) Sell High
(Just like any merchandise, homes for the real estate investor are also considered inventory.)
Preferably in an increasing market place, City or Town where jobs and construction are noticeably increasing!
Without jobs, decreased wages, I have found many of the calls I get from buyers to purchase a fixer upper cannot get bank financing and have little to no money for a down payment.
Investors who were prepared for the real estate market downturn banked money to invest in devalued vacant homes that many people lost to foreclosure.
Selling a home on a land contract has some similarities to landlords. Collecting the monthly contract payment instead of rent can still be a challenge!
A buyer on a land contract simply cannot be evicted, the real estate investor would have to foreclose. To hedge against that possibility, the down payment should be a minimum total of six months of the monthly contract payments.
How to flip a house every two years for beginner investors.
Two years because currently there is no capitol gains tax on the profit of a primary residence you've lived in for 2 years.
The Benefits Are:
- Home mortgage financing can be obtained
- The home can be lived in while remodeling
- Home remodeling expenses can be spread over the 2 years
Financing for a "Second Home", versus an investment house is no trick, there are favorable allowances for bank financing for a second home versus an investment home.
After 18 months in the first home,
buying a second home to get ready to move into in time for the sale of the first home after the two year mark,
can make for an easier moving transition, however...
... One real estate sale every 2 years doesn't always provide enough return on investment on lower priced homes.
Still, my obstacle on how to flip a house is...
"Who Are The Buyers?"
Until the market changes - Again,
Flipping houses; 2 to 3 homes per year to earn an income,
to me is risky.
I understand we're in a "Buy and Hold" real estate investing market.
As a small investor, I can only hold one property.
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