RE/MAX Neighborhood Properties
CHERYL SCHUCK, REALTOR®, RE/MAX Neighborhood PropertiesPhone: (973) 727-7626
Email: [email protected]

House-Flipping Tips

by CHERYL SCHUCK, REALTOR® 07/05/2021

Image by Andy Dean Photography from Shutterstock

In past housing markets, it was common for investors to flip houses. Unfortunately, when the housing bubble burst, many buyers couldn't update and sell the homes they'd bought. After a bit of a downturn, the trend has picked back up. However, savvy investors know that the housing market has much tighter margins than it has in the past. If you’re thinking about getting into the house-flipping game, consider the following tips as you get started.

Here are some tips to protect your potential investment:

  • Not every housing market is profitable: Many homes can be purchased, renovated, and potentially sold in every part of the country. But some locations do not have the sort of economic growth that makes property flipping viable. Know your market and local property values. Keep in touch with what’s happening in the community and be prepared with a plan B in case the home doesn’t sell.

  • Do your homework. There are fewer deeply discounted homes available to investors. Plan to pay the full price in cash but arrange a contingency to have the home inspected. If the inspection reveals issues, especially with primary systems such as electrical and plumbing, walk away. Or, offer the seller a lower price to account for needed repairs, and potentially get a better deal. Anything revealed during the inspection that the seller did not fix your responsibility to repair or replace before you can flip the property.

  • Respect your margins. Unlike in reality shows the profit made from buying and selling a home is not as large as it appears. When you find undervalued homes, you need a cushion built-in for the rehab. If the difference between what you paid and the new selling price is insignificant, it’s not a sound investment. Avoid purchasing property that requires thousands of dollars of repairs or upgrades. You'll end up with a lovely home, but little to no income to show from it.

  • Constantly monitor the inventory. Fewer homes on the market mean finding one with flip potential is more difficult. 

Seek help from a professional

Maintain a close relationship with your real estate professional so that when potential homes come on the market, you’re the first to hear. Your real estate professionals know the local market. They watch the trends and know who is buying, who is selling, and who is holding. They also know which repairs and upgrades are essential to make a quick sale. Let them guide you.

About the Author
Author

CHERYL SCHUCK, REALTOR®

As a lifelong resident of Morris County, with over 19 years of full-time real estate experience, I have accumulated a wealth of knowledge and experience that my clients can draw from.  

My goal in real estate is to educate my clients in the process of buying/selling homes. Whether this is your first transaction or your fiftieth, I will walk you through each and every step and coach you the entire way.

To ensure stress-free transactions, I personally handle details including choosing an attorney, obtaining financing, preparing comprehensive market appraisals, supplying reputable building inspectors, providing target advertising, and all other aspects of the real estate transaction. "PLAYING HARDBALL" is also necessary when negotiating the best possible price and terms for you.