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The most accurate way of describing this type of investing is purchasing a house or property with the intent to sell it for a profit.
Rarely you may purchase a property undervalued, and sell it without doing any repairs or renovations; this is the exception not the rule. In most cases, flipping includes purchasing distressed properties and performing necessary renovations to create a current and fair market value when finished.
Somewhere between your purchase expenses and your selling price, minus improvement costs, remains your profit.
As with any real estate investment, it is very important to make certain you are buying a property for the right price. You must also have an idea on what it will cost to do repairs, and the market value when complete.
When you finish your renovations and receive a contract on your real estate, purchasers will hire an appraiser to value the property they are buying. Most buyers will not pay more than a property appraises for no matter how much you have spent in renovations.
In more direct terms, flipping can be very dangerous if you need to spend more money than the property will be worth at the end of your renovation.
With flipping, there are a lot of decisions to make in the beginning, and having a plan is very important. Where to buy, neighborhood concerns, market trends, what are the do's and don'ts in renovations just to name a few.
Todd Sachs and his team of Investment Realtors believe when flipping properties, the most important question to ask is “who is my buyer?” Knowing this upfront, will help you decide what renovations are necessary every step of the way.
At the end of the day, Todd states "when you can provide a slightly over renovated finished product with a selling price slightly under market value, you will sell your property quicker. Making a modest profit quickly as you can will allow you to make larger annual gains on your cash." Contact us today, and allow the Sachs Group to help you earn wealth through real estate.