We know that housing prices, and even more so with mortgages, are sky high, and not many of us have enough money to buy a newly built home, or at least one that has everything we would like. If this is your case and you would like to buy a house, I’ll tell you that you might be interested in doing
house flipping
.
Did you know that almost 60% of the houses that are sold need some kind of improvement or renovation because they have structural problems such as humidity or water leaks?
What for some people may be a disadvantage, for you could be the opportunity you’ve been waiting for. Sometimes it’s a matter of luck, or rather, of knowing how to see where that opportunity is and making it play in your favor.
What is the house flipping method?
Literally,
flip
means to turn or flip something around and
house
means house. So, in a literal sense, it could be translated as “to turn the house upside down”.
But, obviously, it is not necessary to take everything at face value. Actually, what has come to give it that name has been the tendency to buy a house in order to transform it.
Especially in the United States, it has long been established as one of the solutions to be able to buy a house at an affordable price. How? Buying a home at a lower price and then renovating it and selling it at a higher price.
In other words, you keep what others don’t want. But what difference does it make if no one wants it, if that’s precisely what you’re looking for?
How to do house flipping?
Seeing as I’m getting your attention, I’ll jump right in to tell you that while giving a home a second chance may lead you to get the home of your dreams or the money you need to buy another home, it can also catapult you and become your worst nightmare.
Make
house flipping
has its risks, but as long as you know them, everything is fine.
And by this I mean knowing where you’re getting into. Not only to be well informed about how to do it, but literally to know what you are getting into: what the house is like, what its real value is, what the market is like and what the condition of the house is.
Paying a low price, however low it may seem to you, can be a very high cost if you do not know what you have bought. For example, an Englishman goes up, a German comes down and a Spaniard enters… Buy a dilapidated house 140,000 euros, to think that you can renovate it with 20,000 euros and sell it for 200,000 euros, and that, finally, you have to invest 80,000 euros in those improvements and you can only sell it for 195,000 euros is a beginner’s miscalculation of house flipping.
In order not to leave the Spanish language so bad, it is true that there are additional costs that may arise for solving problems that are not seen during the visits. But this should also be considered as possible contingencies.
And, in addition to knowing everything else, to buy a house with no money and then make it profitable, it is essential to know that you must sell it quickly, otherwise you will not get a quick return on the money invested, and most importantly: look for a house with potential.
How to find a house with house flipping potential
Location
Looking for a house near a school is not the same as looking for a house near a university or a business park. The potential buyer of that house will be very different and their needs will be very different.
Value of the property
In order to make the transaction profitable, it is important that you buy it at a lower price than you are going to sell it for. In other words, the cost of renovating it together with the price you paid to buy it should not exceed the price for which you are going to sell it.
(Purchase price + refurbishment costs) < sales price
Or, to put it another way: that you sell it for more than what it costs you to buy it and renovate it.
Selling price > (purchase price + renovation costs)
PS: believe me when I tell you that the formulas were necessary.
Condition of the house
That is, what problems or risks exist in the home. One thing to be concerned about, for example, is cracks in the pillars. One thing not to worry about is an old switch.
Things that you probably have to do are:
– Install new flooring.
– Renovate bathrooms or kitchen, or both.
– To make some enlargement or division of spaces.
– Knock down a partition wall.
Very important note: worry and run away if you find cockroaches in the fridge, because imagine what you will find in the rest of the house.
Knowing the market
That is, the buyers.
Market = buyers
(This one was not so necessary).
- What do you think those interested in buying a home in that neighborhood would value most?
- How much would you be willing to pay to have it?
- Why should I buy your house and not another one?
They already do
Although in Spain we often lag behind, in the United States there are many businessmen, celebrities and individuals who do house flipping.
house flipping
among them…
Leonardo DiCaprio there is only one
As there is only one Diane Keaton, but they also took advice before buying a house to sell it.
I’ll read you in comments!
