How to Flip a House and Make a Profit

How to Flip a House and Make a Profit
by Ben Hayes


The art of "Flipping" a house" consists of buying a run-down property or a foreclosure below market value. The idea is to increase its overall value and rapidly re-sell the improved property for a quick profit. If you research and buy at the right time you can make $20,000 to $50,000 or more per flip, and do it in less than 90 days. Steps "How to Flip a House"

1. The most important step in the flipping process is to educate your self about the real estate market. Read magazines such as Forbes, Entrepreneur, and Money; these often have articles about real estate. The housing market is very lucrative, at one moment the prices of homes can dramatically increase, while overnight property values can also decrease. Look in the area for specific prices of homes with the same property type. For instance use other people's sales statistics and market values as research tools. If you are looking at "flipping" a single family home that is 2000sq ft the asking price should be significantly lower than the actual market value. Remember you are trying to unload this property quickly.

2. Looking for a home. These are some ideas on what to look for in a great "flipping opportunity" o A home with room for improvement might have a run-down yard, old carpet, a good spot for a carport, or other things that can be fixed with a little money and some hard labor. o Some people look for distressed properties. Those are ones that the seller is "desperate to sell" for reasons such as: divorce, bankruptcy, death, poor condition of the property, late on payments or other. o Look for homes that sell in the middle to upper range. What that means is the amount where the average family would be able to afford it. Generally that means between about $200,000, and $500,000 depending on your area. You want that price range because these sell the fastest as theirs the largest population density looking for these mid range homes. It could be much less or much more but that's about the average. The home should have: 3 or more bedrooms. It must have at least 2 full bathrooms.

3. Once you have done your research and found the perfect opportunity, you are ready to get started. First find a specific lender that will allow you to take out more than your asking price for the home. Ex. always allow yourself extra money for unexpected repairs, many times you will find labor and building material costs may not be what you envisioned. I usually allow an extra 5,000 dollars for repairs and excess costs.

4. Sit down before you start and agree on how much money is going too be spent during what phase. Give your self a plan of action and a daily routine, this is very important to finish your flip in the allotted time. Say on Day 1 all of the demolition work needs to be completed-- a reasonable goal. Keeping this type of journal or notes will allow you to easily calculate where you stand on purchases and how much is left for you flip. If you have ever seen "Flip This House" you know what I mean here. Many people think that you can just buy put a disclosed amount of money into the property and resell. BIG Mistake.

5. Lastly always finish the little details and remember to get you house evaluated before putting it up for sale. Look at the prices in the area and other homes of the same space type. The best thing is to pick a day and visit open house in the area; this will give a good idea where your house needs improvements or points of emphasis you can tell the buyer during your open house. I generally will on purposely sell my properties for about 5% below market value. I know what you're thinking he is crazy Right. Step back and look at from my perspective below market value. This allows more people to look and quickly sell your house before the first payment is due--in many cases you will make one or two. My term-Quick Profit. Regards and good luck BH

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About the Author
I have been flipping houses for a few years while working on my home business. I saw great oppertunity to make real profits within the real estate market and flipping was born.