House Flipping Is Back
House flipping is when a real estate investors purchases a home in need of work, whether via foreclosure, short sale, bankruptcy sale, or regular sale, rehabs it, and then sells it for a profit. House flipping used to be very common prior to the 2008 real estate and mortgage collapse but since due to the credit freeze for real estate investor and tough credit markets, it came to almost an abrupt halt. However, with the real estate and housing market recovery, house flipping is back and many real estate developers and builders are purchasing homes that are foreclosed and rebhabbing them, and selling them for a nice profit. It is normally a win win situation for both sellers, buyers, and the neighborhood. Sellers, the developers, make money, buyers get a nice renovated homes at market prices, and the neighborhood goes up in value due to the renovations of short sales and foreclosures.
Tips For House Flippers
The key for investors interested in house flipping is to purchase the home at the right price. Remember that when you acquire a short sale home or foreclosed home, every aspect of the home needs to be inspected and everything needs to be done by code. Make sure you take out the proper permits because the new buyer of the home will most likely be a FHA home buyer and FHA appraisals are stricter than conventional mortgage loan appraisals and stress safety and security. Material costs can be quite expensive and there is no end on how much you can spend on rehabbing a home, especially if it is a gut rehab. House flippers are business people so keep in mind that your main goal is to make a profit. If you overimprove your home for the area, plan on sitting on the home for the right buyer.
Home Buyers For Your Home
If you are a house flipper, you need to always think about the potential home buyer. There are tough financing rules and regulations concerning house flipping. For a FHA home buyer who buys a home that has been in the market for less than 180 days and the seller of the home is selling the home for 100% or more than their acquisition price, two appraisals are needed. The home buyer’s mortgage lender might also require proper permits for additions and structural repairs. The home buyer’s lender may also require a home inspection. If you are in the house flipping business, you need to be sure that you do all the work per code and take out the proper building permits or else, you might not be able to sell your home in today’s tough regulated real estate and mortgage markets.
By Gustan Cho