Jacob Peterson - Fixing & Flipping Houses: A Step-by-Step Guide for Real Estate Investors

Fixing & Flipping Houses

A Step- by- Step Guide for Real Estate Investors

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Disclaimer

This document is geared towards providing summarization of information related to the topic. While all attempts have been made to verify the accuracy of the information, the author does not assume any responsibility for errors, omissions, or interpretations of the content. The information is offered for informational or entertainment purposes only. If professional advice is necessary, a qualified legal, medical, financial or another respective professional should be consulted. The reader is responsible for his or her own actions. The publisher does not accept any responsibility or liability arising from damages or losses, real or perceived, direct or indirect, resulting from the use of this information.

Introduction

I want to thank you and congratulate you for downloading the book, Fixing & Flipping Houses: A Step-by-Step Guide for Real Estate Investors.

This book contains step-by-step guidelines on how to fix and flip houses. Steps include a discovery of the past, present and future of flipping, along with detailed information on how to find the right house to flip, how to evaluate repairs and cost and ultimately how to sell the property.

What makes this book special is that it does not shortchange you on the information available in flipping houses, instead it gives you a birds eye view of the business both pros and cons. While some other books paint a bright and ideal picture of the business, this book also informs you about the dangers, risks and pitfalls in flipping houses.

However, it does not end there, this book will also provide you with tips and tricks on how to avoid these dangers and minimize the risks. A Dos and Donts list of experienced flippers is included in the book.

If you are ready to be part of the real estate market and take your share of the profits gained from flipping real estate, then this book is for you.

If you have fears of the complexities of the real estate business then this book will help you overcome these through the straightforward and practical information written in this book.

If you are interested in this book, just to get profit or to fulfill your passion of fixing and renovating houses, then this book will satisfy your curiosity.

Thanks again for downloading this book, I hope you enjoy it!

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• The past, present and future of flipping
• The secret to track the trends in the real estate market
• The risks involved in the flipping business

F lipping is the colloquial term used for real estate or residential redevelopment. Essentially, it is the buying of a property with the intent of selling it for a profit. However, between the buying and the selling, there is a whole range of considerations, research, planning, logistics, money and time not to mention patience and courage that have to be done for a successful sell.

Flipping is fundamentally a business endeavor, using this as your basic concept will propel your future ventures. However, an understanding of flippings past is as important as predicting its future.

The United States housing bubble occurred due to a combination of several factors. The relaxed borrowing standards meant that lending institutions were allowed to give out loans without much scrutiny to the borrowers capacity to pay. As more and more houses were built and purchased, due to the influx of borrowed money, the supply outpaced the demand and the house prices depreciated.

Homeowners, who were not eligible for the loans, soon were unable to pay their mortgages. The properties were foreclosed and ownership reverted to the lending institutions. The lending institutions now had several houses, with prices depreciated and loans unpaid. This resulted to low liquidity; their money was tied to the houses, which were losing their value in a daily basis.

In short, there was not enough money to go around to lend out again as loans, pay the bills or for other transactions which required not assets but actual money. The bubble burst resulting to a frozen market that was bailed out by the federal government.

As the US began recovering from this economic crisis, the houses remained idle. There were now a huge number of abandoned houses across all states, with owners just wishing to sell them as soon as possible. From this disaster, a business opportunity was discovered.

RealtyTrac, one of US leading sources of housing data has the following encouraging figures for any aspiring flipper: From 2011 to 2013, the average profit for a flip rose from $15,000 to $58,000. The number of houses flipped was from 73,000 in 2011 to 156,000 in 2013. While it took an average of 100 days to flip a house last 2011, it only took 84 days to flip a house in 2013.

T here are two kinds of flipping:

1. Buy Low & Sell High Flip
2. Fix & Flip

In the first kind of flip, the idea is to buy from an assortment of foreclosed properties usually in an auction or from a bank. This means that the prices are significantly lower and almost at bargain price In a sense, you can buy them low. To sell them high, it is possible not to do any fixing or improvements, instead all you have to do is to prospect and anticipate an increase in value.

Hold on to the property, the real estate business may be fickle but it is always cyclical. A period of boom, like the bubble, will always end up in a plateau or worse, a decline. The opposite is also true, when the boom returns, sellers can almost name their price.

If you are buying in an area with a large amount of foreclosed properties, then the market is in a plateau or decline. To determine if a boom is about to happen, survey the area. Are there any new developments in the neighborhood? Are there any commercial establishments opening soon? Is a well-known company branching out nearby?

Arguably, this kind of flipping is morally ambiguous and some flippers actually discourage it. According to Michael Lacava, a contributor to an online real estate magazine, if you buy a property that is already abandoned and is in bad condition, then selling it at a higher price, without actually increasing its value, then you are being irresponsible.

Fix and flip is another kind of flipping, which involves a great deal of work but can result to wider profit margins. You may choose to buy an undervalued house, due to its current state of disrepair, then fix it and then sell it at a profit. You can also choose an already maintained house, improve it by updating it to the current trends and then again sell it at a profit.