Rehabbing Properties For Fun and Profit

If you have good construction skills, rehabbing properties in need of repairs is a smart way to insure your success in the fix and flip real estate game. However, it's not enough to simply buy foreclosures and turning them around for a quick profit. You need to know where to find foreclosures that are suitable candidates for a fix and flip real estate transaction before you jump into rehabbing properties.

What Flipping Houses is All About

Fix and flip real estate is nothing more than finding a property that is "distressed" and in need of rehabbing, properties that are in foreclosure and other homes that you can get cheap and sell for a substantial profit.

Here is the caveat: while it's fairly easy to find foreclosures that are in need of repair, you need to understand that there are numerous factors that can cause a home to lose value. Not all of this has to do with the actual condition of the property and whether or not it needs rehabbing. Properties can lose value simply because there are vacancies in the neighborhood. In general, you don't want to buy foreclosures in a neighborhood where there have been a lot of foreclosures, as this fact can depress property values - unless you are certain you can locate a buyer who is willing to pay something above market value or you can afford to hold on to the property until values in the area recover.

The Best Way

A good place to find foreclosures is the local bank or another lending institution such as a mortgage company. Such institutions keep listings in house, and this can be a great place from which to buy foreclosures. The reason: it costs these banks money to hold on to these properties, so they are very motivated to unload them.

Another place to find a good candidate for your fix and flip real estate transaction is a local real estate auction. You can find some decent bargains here, but keep in mind that you may wind up bidding against potential buyers from across the nation - and the competition can bid of the prices very quickly.

Regardless of which kind of flipping transaction you are planning to do, it goes without saying that you had better have a buyer lined up ahead of time - otherwise, you may wind up stuck with an albatros around your neck, paying on a mortgage and property taxes on a place that you can't keep and can't sell.