There are thousands of people every day who wonder how to get started in flipping houses for profit. It can be a sure fire way of investing and gaining a financial return. For many investors, flipping houses is a main source of income. It is their “day job” and livelihood.
Investors who earn a living from flipping houses will begin the process by buying a home that is on offer at a low price.
Which Homes are Priced Low Enough to Make House Flipping Profitable?
Often a home that is pending foreclosure will sell on the real estate market for a low price. If a couple are going through a divorce or the homeowner has lost his job recently, the need for a quick sale means the asking price is below the market value.
There are often homes that are in need of renovation or redevelopment and the current owners simply cannot afford to carry out these repairs, or don’t want to. The homeowner may sell to a house flipping investor and they will fix up the property and perhaps, even rent out the property to the original owner.
How Does Flipping Houses Work?
Usually an investor will go along to an auction and get bidding on a home that needs some tender love and care, is pending foreclosure or is in need of redevelopment. The prices these homes can be purchased are well below the market value for properties in the area or region.
Once the investor has won the bid and purchased the home at a low value, the hard work of renovation or redevelopment must begin. Many homes simply require no more than a good lick of paint, new carpets and old style fixtures and fittings replaced. The kitchens are almost always in need of replacing.
Once the development of the home is completed, it will go back on the housing market at a much higher price than was originally purchased for. This gives the investor an instant profit, often in as little time such as six months or under a year.
A successful investor who aims to “fix and flip” will buy an apartment or townhouse for as little as $50,000, spend $10,000 fixing up the property, then selling it on for a figure of around $100,000. This gives a $40,000 profit on the first flip.