The simplified definition of house flipping is the purchasing of a property with the intent to improve and quickly resell it for a profit, doing this very thing has become quite popular in past years. The properties involved with these flips can for the most part be split into two groups. The first group being houses that require mainly cosmetic improvements and upgrades such as cleaning, paint, new carpeting, appliances and fixture upgrades, etc.

The second group of houses is the ones in need of major refurbishing; this group can involve such things as moving walls, new drywall, windows, doors, kitchen cabinets, new roof, landscaping upgrades and so on. This type of project should not be attempted as a first time flip without good working knowledge of what is involved. The desired end result with either group should be a job done right with a profit, when done correctly and with the right choices the profits can be very good.

Flipping guidelines

1. Financing

You should know in advance where you plan to get funding so that you can move quickly when you find the right property. Your credit is an important factor here with helping to get the best loans and rates but it is not the only factor, so dont let it hold you back, just work to improve it. There are many financing possibilities so explore the options, search for potential lenders and get pre-qualified from up to three lenders. Another option to consider is to begin with the house you currently have as your first flip.

2. Know your market

Familiarize yourself with your local housing market, what are people looking for in a house, what kinds of features, what size, how many bedrooms and bathrooms, are these types of houses in short supply, what are houses such as this selling for, do these houses sell quickly? It is essential to know and understand the answers to these questions.

3. House selection

Knowing and understanding your local market makes selecting houses much easier because you know what to look for and can recognize the bargains when you see them. If the house is in the right area, making a selection basically comes down to four questions; what can you purchase the house for? What are your estimates for repairs? What can you sell the house for when completed? Does this leave a profit?

4. Location

People are looking for nice homes in safe, good neighborhoods, when looking for houses you should be looking for the reasons people would be attracted to the neighborhood. The house should be located in an area that has been and will continue to appreciate. If this is a home you envision for a young family, where are the schools located? Will your completed project be improving the neighborhoods value?

5. Inspection

After finding what looks to be a promising flip, a thorough inspection of the house must be performed, depending on your experience and comfort level with doing this type of thing it may be a good idea to have a home inspection performed by a professional. Hiring an inspector will cost a few hundred dollars but can save you big money in avoiding unexpected costly repairs such as a bad roof, structural issues and the termite damage.

6. Material costs and Ideas

It is important to know and understand what improvement costs can run when looking at properties so that you can make fast and fairly accurate estimates. To help you with this, I would recommend walking through home improvement stores often and looking at everything from building materials to paint, fixtures, appliances, tile, carpeting, lighting and so on. These walkthroughs can also help with filling your head with ideas.

7. Choosing the improvements

Getting the most bang for the buck is important so that you can achieve the best return, something that can help you with this is to examine houses that sell quickly and note what these houses had that made them attractive to prompt a quick sell. What kinds of features did these houses have, such as flooring, paint colors, appliances, lighting, fixtures, and curb appeal? What was the selling price in relation to similar houses sold recently in the same area? Observing these points will help you to recognize the values of various features that attract people and help you to make wise choices.

8. Planning/budget

It is very important with every flip to develop a thorough plan, the initial begins as rough numbers that includes purchase costs and fees, an estimate of the improvement costs and a projected selling cost. The actual working plan then takes in to account a detailed list of what you are planning to do and cost figures for each of the items, the plan also should include a timeline from start to finish, be sure to include a little extra time and money for the unexpected, Time is money! Finally the plan should have a projected selling price.

9. The work/labor costs

It is best to know how to perform the majority of your planned work or at least a good portion of the work to begin with and then expand upon your skills from there. If you will be unable to perform some of the required work, you will need to search out competent and reliable help with this. I would caution you here to be very careful in your choices, be sure you know the person you select well or if otherwise check references carefully. You do not want a person who starts the work and then disappears for a week or more.

10. The Sale

From day one of your flip you should consider your flip for sale because it is possible that in could walk an interested person, so you need to have a good idea of your expected selling price. Within a couple weeks of your project completion you should be thinking about the sell, there are several options at this stage to consider but keep in mind that a typical realtor will charge 6 percent of the selling price. To save a ton of money I would recommend searching for a flat fee realtor, this will give you the benefits of having a realtor and get your house listed in your local MLS multiple listing service.

Flipping and fixing houses can be a lot of fun, exciting and quite profitable for those that enjoy this type of work and the challenge it offers. The above guidelines are meant to be of assistance, keep in mind they are highlights and are far from being all-inclusive of what is involved.

In addition I would like to comment that the real estate market just like everything cycles up and down. Currently the housing market when looked at nationally has been in a slowdown, an over abundance of new housing in certain areas this panics some people but it does not mean there is no money to be made in flipping, the opportunities still abound and they always will. A slower market just requires more caution, good research, thorough planning and onward you go! The housing market in many parts of the country is still very active and growing at a good clip, keep in mind that its all about supply and demand, guideline number two.

http://www.flipnfix.com