How Do You Decide Which House To Buy And Flip?
July 7, 2008
At the end of my last post I mentioned that I planned to reveal a house flipping technique few understand. Before I reveal this under-used technique lets talk about how to make the decision to buy a home for flipping.
Right now in your hometown I imagine there are several homes up for sale. In fact, just down the street from me is a small two-bedroom house that has been on the market for about a month. The family of the owner who passed away is selling it. I have been watching closely to see what type of interest there is in the house.
So far very little interest, I have only witnessed two people tour the home with their realtor. So I called a realtor buddy of mine about two weeks ago now so that I too could see the inside. This house is a perfect flipper. I just dont have the time or I would have bought it by already! Why is it perfect?
First, the bad on this property, no one seems interested. And from my opportunity to see inside, I know why too. The kitchen and both bathrooms are out-dated. The bedrooms are small. The basement is dark and damp with no egress. And finally it only has a 1-car garage.
The house does have a few good things though. The kitchens and bathrooms can easily be gutted and remodeled. Hardwood floors, in great condition, in the living room and both bedrooms. The roof is new in 2006. Siding is in good shape too. I also took a look at the service panel and could see that the home has been re-wired and brought up to code.
Put an egress in the basement and it could easily be a 3 bedroom, two bath home.
Asking price for this home is $95,000. My buddy figures that it is $10,000 too high, I think more like $15,000. But we both agree that it could easily sell for $125,000 after repairs.
Say I offered $82,000 for the house. Put $12k to $15k into remodels and sold at $125k. I could make potentially $25,000 to $30,000
Now back to my question, how do you decide which house to buy and flip? Given the example above, for me, I should buy that house. I have the knowledge, expertise and contacts to do the repairs and make a ton of cash.
And that is the answer, in my opinion; if you are willing to do the work yourself then buy the house youre considering and flip it. It is true you can still make money when hiring all the work done through contractors, just not nearly as much.
Its true there is more to the equation than my simple example above. My purpose was to illustrate how not to make your decision to complicated when buying houses to flip. Decide before hand what your house flipping business plan will be before looking to buy.
George Christodoulou
If you have questions about house flipping or if your still asking" How Do You Decide Which House To Buy And Flip?",
visit, http://houseflipblog.com for more information about house flipping.
Stay tuned to our new house flip author Doug Philip. He is sharing all her secrets as a contractor/flipper.
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