What is a “flipping” a house? A flip is a residential investment when a house i is purchased in bad condition, with the intention of renovating and/or remodeling, and is then listed for sale for a profit.
So what can be some of the challenges when purchasing a home to flip? These types of investments have many moving parts, so savvy investors will know how to look at the deal from different angles. The purchase price can be as important as the renovation budget or the contractor you pick. The typical variables such as location come into play, along with making renovations that are comparable to what is popular in its proximity. Following are some pointers to follow when venturing into flipper territory.
1. Research the Prior Condition of the Subject Property
It’s important to know as much as possible of the home prior to moving forward with the purchase. Often times flipped homes are foreclosures from banks. Bank owned properties often sit vacant for extended periods of time, resulting in a number of possible things that can go wrong with the property. Has the home been vandalized? Copper wiring/plumbing removed? Did the pipes burst? If there is moisture in a home, mold? These are all items that can have a considerable effect on the cost of the repairs, therefore making them key in the success of the transaction.
2. Know who you’re working with