Flipping houses has once again become a hot commodity, especially for newbie real estate investors looking to cash in on the endless supply of bank owned properties.
House flipping in today’s markets is what I consider to be an art or a skill of sorts and although I will admit there are tons of bank owned properties that perhaps sound like great investments it’s more than likely you’ll either break the bank or end up with a rental property which coincidentally isn’t that bad. However, our main goal is to flip houses to generate income now and as investors if you’re going to succeed at flipping houses then you must first consider some key elements when it comes to investing.
Below you’ll find a list of three key elements to consider for flipping real estate.
1.) Market Research: This is by far the most important step to consider when choosing your real estate investing playground.
There’s money to be made right in your own back yard, you just need to know how to find it. To many times do I hear investors say “I can’t make any money in my city” or “I bought an investment property to flip and now I’m stuck with it.” Before you buy any type of real estate investment you need to first research your market of choice.
The best way to conduct your research is to break your city down by areas (north, east, south, or west) or zip codes and see what the trends are. It’s really not that hard to do and once you can understand and figure out where people are buying the most, then you can proceed to search for property in those hot areas. Understand that not all areas of the U.S. have been affected by the real estate bubble. Coincidentally, some parts of the country are showing signs of an increase in price.
2.) Days on Market: If you want to succeed at flipping houses you need to understand where your buyers want to be and once you figure that out you need to look at the days on market.
The days on market will give you a close estimate of how many days you can expect your house to be on the market for sale. A word of advice: When listing your property for sale, start by listing it 1 – 2% less than what the rest are selling for.
3.) Speed, Speed, and Speed: Once you have decided on your area of choice you need to act fast.
Contact your local REO agent or friendly realtor and begin to submit offers. Once you get an approval you need to rehab the property as quickly as possible and get it back on the market for resell. Remember, real estate investing requires continued education. The markets along with the lending guidelines are always changing and it’s your job to stay on top of what’s going on in your city of choice. (Make it your job to become the expert in your city.)
