Flipping houses is an interesting business that has been brought into the public consciousness as a result of reality TV shows focused on this niche enterprise. There are certainly benefits of flipping houses, and a couple of risks to consider. These are some of the benefits and risks involved with flipping houses.
The main benefit of flipping houses, and the idea that attracts most investors, is the possibility for financial gain. A successful flip on the right property can result in tens of thousands of dollars profit in a relatively short period of time. There are few other businesses that provide the same rapid profit potential as house flipping.
Rehabilitating a run-down or older home and then flipping it for a profit can also be a rewarding experience by itself. This benefit is similar to that experienced by pickers who search out and buy discarded collectibles or antiques and pass them on to a new buyer who appreciates the item. There is just something rewarding about bringing a house back to life and then selling it to a buyer who will enjoy living in the home for many years.
Things to Keep in Mind
One of the biggest risks with flipping houses involves unexpected expenses. Ideally, you will be able to have a full inspection performed before purchasing the property, but many homes that are bought to flip are purchased at auction or in foreclosure. Even with a pre-purchase inspection, there may be unexpected repairs that need to be performed before the property can be resold. As such, it may be wise to budget money for unforeseen, miscellaneous expenses.
Flipping houses often requires working with a lender that understands the business of flipping houses. Your local bank may be reluctant to finance a house that will be flipped, or may impose restrictions on the loan that complicate the process. Mortgage Man is a private lending firm that understands the business of flipping houses. We offer short-term financing solutions to investors who are in the real estate investment business. Contact us at 502-400-3011 to learn how we can help with your real estate financing needs.