As most of people probably know, house flipping is a process of buying an undervalued property, investing in its renovation and improvement if needed and reselling it at a bigger price that covers all the investment and brings profit. The profit can be substantial if you do everything right but you could also lose money if you do not. One of the best things about house flipping is that the most important step, finding a suitable property, is something that can be done from the comfort of a home. Here is how to turn house flipping into a great home business idea.
Why is it a great business idea?
First of all, house flipping market is enormous. The most profitable flips are those involving foreclosure properties and although the foreclosure crisis is less intensive nowadays it is safe to say that it is not nearly over. The estimates are that around 2 million homes are to be foreclosed and another 5 million are at risk of facing foreclosure this year only. Such large numbers present a great business opportunity and promise good odds for making substantial profit.
Why is it a great home business idea?
Finding a suitable affordable property is the most important step in house flipping business. As it was said before, the biggest opportunities lie in foreclosure homes and the list of those homes is constantly updated and can be found online. Therefore, completing the most important step of finding a suitable foreclosure is something that can be done from home; all you need is a stable internet connection and a phone to find out all the important initial details.
One person team
Another reason why house flipping is a great home business idea is the fact that it does not require a lot of staff nor large business premises. A single person and a single room are enough, as long as he or she is dedicated, meticulous and fast thinking and reacting kind of person. The business itself will require field visits if you wish to be completely certain that the property you plan to flip is truly worth it.
However, it is the initial narrowing of choices that really saves time and sets the positive course of the entire process. Once you or the person you hired estimate the profitability of the renovation work you hire a professional to do it. All in all, you as the owner are the only staff member; everyone else is hired when and if needed.
On the other hand, not everyone is cut out to be successful in a house flipping business. As it was mentioned before, meticulousness throughout the process is absolutely required. Knowing legislative procedures, as well, since the completion of the deal requires a lot of legal paperwork, both when purchase and sale are in question. Also, since things tend to change in the legislative area, it requires continual education and constant application of the best house flipping advice available. To finish the list of required characteristics of a successful house flipper, good estimation and patience are obligatory. It takes estimation skill to pick suitable properties out of the millions listed and it is very rarely that they will be flipped overnight.
Things to look for
Although house flipping rarely brings an overnight success it is essentially important that the entire process is finished in the fastest possible manner. The reason for this is that the longer it takes the more needs to be invested and there is a risk of a market change which consequently could decrease the overall value of the property. Furthermore, the ongoing cost of utilities, property taxes and insurance are naturally your obligation as long as you own the house. To avoid this as much as possible, pick the properties that are located in desirable and safe neighborhoods with good infrastructure and in the vicinity of good schools and other institutions of importance. Sound condition is another plus, as well as little maintenance required. Lastly, the closer it is to your house the better since you will have to visit it regularly.
It is not solely foreclosures where money can be made by house flipping. Unused houses in the neighborhood and those whose owners have moved and come back to visit only from time to time are potentially good investments. As long as you avoid making common mistakes, these properties could be flipped at a very profitable rate. The fact that you live nearby not only saves you time and money during the process but is at the same time a guarantee for the potential buyers that they will be moving it the safe and recommended neighborhood. Otherwise, why would you live there in the first place?
To sum up, house flipping is a potentially great home business idea, providing that you carefully study and implement the thing stated above and continually improve your skills. Take your time preparing before you begin and you are off to a good start.