Tips for Profitably Flipping Real Estate

If your REI business focuses on rehabbing and flipping properties to make a profit, you’ve probably already discovered that one of the most difficult decisions you have to make is deciding which property to buy. Finding just the right house can make the difference in several thousand dollars in profit when the deal is complete. So how do you choose?

Here are some things to keep in mind as you begin your search for your first, or fifth, real estate you plan to flip:

Look at the location. Okay, it’s a cliche—location, location, location. But savvy real estate investors know it’s a cliche because it’s true. Before you buy the first property, consider the area you plan to invest in. Every community has characteristics that affect the an average real estate price. By doing some research and knowing the neighborhood you’re looking into, you will be able to recognize a really good deal when you see one. And you might save yourself some major headaches by knowing when to pass up what could end up being an albatross because it won’t sell in a certain area.

Search for fixer-uppers. Properties that need some work can save you a lot of money when you buy. Obviously you want homes that are structurally sound but in need of cosmetic renovations and upgrades. Be sure the foundation is good. Check the roof, plumbing, electrical, etc. But don’t be turned off by houses in need of paint, landscaping, even new fixtures. Know what you can invest and what kind of investment it will take to bring a house to a good resale condition before you buy.

Choose average priced homes. Rather than choosing the best in the neighborhood, or the worst, choose property that will sell at about the average price in the community after you’re done with the rehab. Those that are priced either too high or too low can end up costing you money because they’ll be much harder to sell. This is a something you should keep in mind as you plan your renovations as well. Don’t upgrade the house to where it becomes too expensive for the neighborhood.

Look for foreclosures. Not only can buying foreclosed properties save you money, which is a great thing, but you can often find houses that in are good condition without need of a lot of renovation. By adding a few upgrades, you can often flip a foreclosure much more quickly than one that requires more work. In addition, because banks don’t want to hold foreclosed properties any longer than they have to, you can often find foreclosures at prices much less than the average going price or market value of the house.

Successfully flipping real estate is a learned skill, just like other aspects of the real investment business. But learning the necessary skills can help you turn this into a tremendously profitable business much sooner than you might think.