Is real estate “house flipping” a lucrative career, or is it too risky?
Posted by | Posted in Buy My Home Fast - Questions & Answers | Posted on 25-01-2012-05-2008
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Question by getusedtoit: Is real estate “house flipping” a lucrative career, or is it too risky?
I sure do like the sounds of it, but from what I’ve heard, everybody and their brother wants to get into this business. There’s sooo much competition. Also, don’t you have to have lots of money to get started?
Best answer:
Answer by elletera
House flipping is good when the housing market is doing well. However, when it turns and the economy goes into a recession, you have to be able to recognize that so that you are not stuck with a house that you can’t sell and a mortgage you can’t afford!
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You don’t need lots of money to start it, but you’re a day late and a dollar short. Big flipping went on over the last 2-3 years, but now the housing market is going down the toilet faster than your last turd. House in my neighborhood (which had a LOT of flipped houses) went on market at the ‘end’ of the frenzy for $ 149K, I found out this week that it’s now down to $ 72K and they’re praying.
Flipping is a risky career in a down or flat market. You have to be very good on what and where you buy and the market you are doing the flip in.
When the inventory levels are high, a house sits on the market longer and you incur the cost of the mortgage for those months. In flipping, getting the house bought, renovated and sold in the shortest amount of time is key, as the mortgage eats directly into your profits.
It can be lucrative when the market is good…but extremely risky when not. When you do a lot of the work yourself, it is very lucrative. If you have to hire it all out….you do have to have a lot of money. The last one we sold was just before the market slipped. We won’t do another one until it perks up. We have done four and all the work is done by us…unless the roof is to be done…some things you just let others do.
You not only need to have to have plenty of money but need additional craftsman skills so you don’t have to pay someone else to fix it.
You will also have to pay the mortgage on it until it sells. So pad your Bank Account first.
It makes sense to start out with a partner or form a Real Estate Investment Group. Once you have enough profit stashed away, you can do this on your own.
Right now is more of a buy and hold market. You are not going to get as high a return, unless you buy at a very steep discount. And it will take longer for the house to sell.
That being said, now is a great time to jump is as an investor, because there are litteraly thousands of opportunities to find properties at huge discounts.
You don’t need to have a lot of money either. Matter of fact, if you are going to do it professionally – you shouldn’t be using ANY of your own money.
Hello ALL
One question for everyone that has answered the above question. Have you ever FLIPPED a property? Now lets get started. First off the term FLIP is misused like the word love. The reality is that wholesaling properties at is discount is MARKET proof, if you know what your doing. What happens is that everyone rather have SOMEONE else tell them what is going on in the world. WE are condition to think this way. REAL ESTATE can never be black or white. Every state and even every county has pockets of properties that are ALWAYS outperforming the REST of the market. This is exactly why it can BE lucrative. Because if you manage to go against the grain and put some effort. Build your investor relationships and build your sellers list. There is NO DOWN market. Because people that invest in real estate ARE ALWAYS looking for a deal. So in good markets…everyone wins. IN “bad” markets good deals are worth more.
So in a nutshell. BE your own compass and stop letting people make decisions for you.
ps. Looking to make 95K this month in a DOWN market….you tell me!
It is for someone who knows what their doing.