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What do you need to learn when flipping property?

Mar 6, 2008
If there is a perfect time to buy houses for flipping in this country, then nothing could be more perfect when the house prices are down and for sale houses littered across the nation. Foreclosures are everywhere and distressed sellers are selling their properties at an all time low just to entice buyers. This is the time to flip houses like you flip hot cakes.

The principle behind property flipping involves buying houses well below its true market value. These properties have slight to moderate damage on them which needs to be rehabilitated and brought back to its best condition before putting it back for sale on the market again. The property flipper makes money from the difference of the amount he sold the property and the amount he bought it.

Looks easy enough? Well it is but before you do anything drastic, why don't you study the things involved in flipping first to find out how you can succeed in this business. Like our parents always say to check the pan temperature before frying the fish, this is the time to apply this principle.

The most important thing you need to learn when flipping houses is the inspection. If you don't want an unfinished project in your hands and a mounting debt, then you must do the property inspection from top to bottom. Although this task is daunting to beginners, inspecting houses could be learned with the right mentors and perseverance.

The second thing you need to look at is the rehabilitation costs in your area. Each house you acquire has different rehabilitation needs so that you can't be able to tell your costs accurately by just basing it on your other projects or the projects of others - although the estimate should not differ greatly. One way to speed up your inspection time but still estimate the cost as accurately as possible is for you to prepare a package price for each possible repair. You can prepare in advance a package price to repair a bathroom, a staircase, a kitchen or what have you.

If you want your house to sell within the shortest time possible after rehabilitation, then you also need to consider location before you sign the deeds. During these times when for sale houses are plenty, the location of your property might be the only thing that matters. When everything else is the same, that is to say when prices are all low and houses for sale are plenty, the remaining advantage you can employ is the good location of your property.

When you flip houses, it's a plus if your credit is not problematic. You don't know when you might need some immediate cash and your excellent credit should allow you to borrow money from creditors within short notice. Even though you have some money in your bank account, it pays to leave it alone and use borrowed money to fund emergency cases during rehabilitation.

Although you can really make descent money out of flipping properties, but all business endeavors have some risks involved. These risks can only be mitigated if you prepare for them. Educate yourself as much as you can before you flip houses for the first time and it will not be long for you to see some serious rewards for your efforts.
About the Author
About the author: Jack Cockrel is a real estate investor in Atlanta, Georgia. He has made more than 750 real estate transactions since 1996. For Real Estate Investing Tips get his free course Real Estate Investing Free Course.
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