How to Find a House to Flip
Although the real estate market softens from time to time and housing prices go down, real estate remains a secure investment for many people. While homes across the U.S. have lost on average 15 percent of their value during the last year, economic forecast predictions courtesy of the National Association of Realtors expect this trend to reverse by the end of 2010. Owning your own home isn't the only way to invest in real estate. Instead, you can choose to flip a home by taking it from being rundown and outdated to being modern and attractive. Of course, to ensure that you make a profit, you need to know how to find a house to flip.
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Instructions
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Look at the available homes in your area. Regardless of whether you are doing the work yourself or hiring a contractor, you need to be present during the flip of a house to ensure tasks are being completed on schedule. This will be an easier task if you find a home that's in the city where you currently live or in an outlying suburb.
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Seek out foreclosed homes. Properties that have been foreclosed generally sell for much less than their actual value, which means that you can make a larger profit when selling it after the flip. Most major mortgage lenders such as Freddie Mac or Bank of America have Web sites that list all the properties they currently own as a result of foreclosure.
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Tour the homes you're interested in flipping. Before you purchase a house to flip, you need to walk through it and determine what needs to be repaired or updated. Think of the average buyer and see what potential problems they may have with the house.
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Determine the cost and time to flip the home. Find out how much the repairs and updates will cost and make a budget. You also need to establish a timeline to ensure the project gets done on time. The longer you take to flip the home, the less profit you make.
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Compare the home you plan to buy with other homes in the area. Homes that are comparable in size and located in the same neighborhood tend to sell for about the same price. Knowing this price can help you determine whether or not the home you plan to buy has good resale potential.
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Conduct a property appraisal search. Local governments base the amount of property taxes they collect on a home by the home's overall value. The appraised value of a home is public record, available through your county or city government. Many have Web sites where you can look them up, or you can take a trip down to the appraisal office.
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Tips & Warnings
Some Realtors specialize in the purchase or sale of foreclosed homes. Using them to find a house to flip may be beneficial. Even though you plan to do major work to the home through the process of flipping it, don't skip the inspection before you make the purchase. An inspector may find additional problems with the home such as a poor foundation or mold that you don't have the money or time to fix.
When flipping a home, make sure it fits in with the price point of the neighborhood. A home valued at $500,000 will have a harder time selling in a community where the average house costs $200,000. Include extra money in your budget to cover unexpected expenses.
