When people decide to flip a house, they are in effect buying real estate and selling it shortly thereafter for a profit. This sounds like an attractive and lucrative idea to the entrepreneurial self as we consider new ways to increase our incomes—but, one wrong turn in the house flipping process and things can get very convoluted and expensive
Location, finances, and types of flips will give you a clearer sense of what you might be getting into. When you think about location, there are a couple ideal scenarios where flipping a house will be rewarding and profitable. If you decide to purchase a house in a neighborhood that is working on cleaning itself up, you have a chance at making the neighborhood an attractive feature for potential buyers. Another option would be to purchase in a new developing area where high-end homes attract a special type of buyer that wants luxury features in their home. Also consider that, with these two options, there are some risks that will surface if the neighborhood experiences a high in crime rates or your budget is unrealistic or there could also be a price ceiling for a micro-neighborhood.
There is one major financial goal that house flipping centers around: buy low and sell high. What you need to look for is simple yet not so easy to find in certain areas: property worth more than the asking price or property that is not in good shape but can be repaired with minimal cost or sweat equity. The first thing to do is make a budget. Look at your finances and how much money you need. When you are able to make a bigger initial down payment, the interest rate is lowered. And, don’t forget, it always costs money to do those lengthy repairs and to cover up unwanted surprises.
Now that you know what your budget will be and what you are willing to invest, decide on what type of flip you would like to pursue. If you plan on purchasing a house to fix up, the time and money must be present to invest in the home improvements necessary to push this house to market quickly. Another type of flip that is gaining in popularity due to our current state in the real estate market is buying a foreclosed house at an auction or from the bank. These foreclosed houses are extremely underpriced and are a great opportunity for flippers. The only catch about foreclosed homes is that many may need repairs that the previous owners could not afford to fix. Banks usually sell properties only “as is.” Make sure you know what you need to do before purchasing the home. There are fewer bank owned and short sales in Boulder County than anywhere else in the state however a few do exist.
Michael grew up around Santa Fe and is a longtime resident of Boulder and has been with Sotheby’s International Realty since their inception in Boulder County and along the front range. If you have questions regarding this article or would like information about Boulder real estate or Boulder Luxury Real Estate check out my website. You may also call or TEXT me 303-359-6627 or e-mail Michael Hughes is a Certified Negotiation Expert and full time Realtor at Fuller Sotheby’s International Realty in Boulder, CO.
now whip it
shape it up
try to detect it
it’s not too late
to whip it
whip it good