Distressed Property – Is it a Positive Investment?

June 6, 2012 by  
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There are various means by which one can invest in real estate, the majority of those are based on the premise that the property will increase in value. Nevertheless, there are times when the value of a property drops. Anyone who has experienced this downturn in values needs to decide if that kind of property is merits an investment.  Distressed property raises this question – is it worth investing in?

Prior to viewing a distressed property, you need to make certain of the value of your investment. Sure, you can purchase a distressed property for a few thousand below value based on the quality, but will it really be a savings? You obviously will need to pour some money back into the distressed property and many hours of labor before it can be placed back on the market.

A distressed property may be right for you if you can arrange additional financing, have some cash in backup and have a desire to renovate a property. On the other hand, if hard work is not something you want you should look for a different property. Purchasing a distressed property will mean sleepless nights and money running out the door if you are not motivated. You should also determine to the best of your knowledge whether or not you can make some profit with this type f home. Base your calculations upon the neighborhood, general location, what the current market will bear and what use you will have for the formerly distressed property.

There are certainly profits to be earned with a distressed property but you must be sure it fits into your overall plan and personality. To be a good investment you want to be certain a distressed property fits your current lifestyle. If you have examined your money prospects and long term plans, if you can lay out the additional money for a distressed property and the time and labor – it may work out for you. When a distressed property works out right, it is truly a rags to riches outcome.

What Does Flipping Houses Mean?

June 1, 2012 by  
Filed under Real Estate Tips

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To maximize your profit potential when buying a home, you may want to flip it. Flipping a home is a phrase that is used more often now in the real estate industry. Flipping a home occurs when a person takes over a house, remodels it with various strategic changes, and then turns around and sells the house for a potential profit. If you can purchase a property for a reduced value and fix it up prior to selling it, – you can make a pretty nice profit from it for a modest investment – and it is a great means of beginning your career as a real estate investor.

The house flipping process starts by locating a property that is below market value. Often these homes are called fixer uppers due to the initial work involved in bringing them into livable condition. This type of house can be readily found in any geographical real estate market. They could be a house for auction, a foreclosure, or a house that has been run down with little or no money put toward upgrading it through the years. These houses are prime properties for house flipping since they can usually be purchased for a reduced price.

Once you locate your target house to flip, you follow through with the offer to purchase as you would any other house. You will take care of the mortgage details and closing costs as you would normally and when doing so be sure you take possession of the property as a business and not as a sole individual owner. When the property close and you have possession of the place, you can either move in and begin the redesign and upgrade or live off property and fix the house as it sits. This latter method of flipping means you will need to pay attention to carrying costs that will eat into your profits so a fast flip is conducive to making a profit and listing at a higher price.

House flipping is an art unto itself and not everyone is cut out for the challenge. If you are handy with tools and have renovating experience you will be a good house flipping candidate. You can also hire professional contractors but again your profits will be reduced because of labor costs. You can make a decent living by simply house flipping a few properties each year. You should enlist the aid of a competent realtor with excellent market knowledge and the ability to lead you to good properties with house flipping potential.

House flipping is a wonderful way to make a great deal of money in the real estate game. Potential house flippers would be wise to enlist the help of property inspection experts to aid in the first few flips so you can minimize your chances of buying a property with expensive hidden damage since this can kill any profits quickly. If you like taking a risk for a reward, house flipping may be just right for you.