To Flip or Not to Flip....?

Todays BLOG post was contributed by Kristi Cirtwill

In the last few years, investors who have bought properties, fixed them up and sold them for a profit (otherwise known as “flippers”) have had a great opportunity. Even if the project took more time than anticipated, the flipper had an appreciating market to work with. In many cases, multiple offers would come in on the property, sometimes resulting in bids over list price. If you were a flipper in the last few years, you almost couldn’t go wrong!

However, as we all know, markets do change! We have entered a period where we are in more of a buyer’s market (more sellers than buyers = a buyer’s market). We are experiencing a bit of a slow down in terms of how fast properties are moving and what price sellers are actually fetching for their homes. The media plays an interesting part in all of this too of course….(but that is a topic for another blog….)
So what does this mean for the flipper? Are his rehabbing days over? How can he possibly make any money flipping houses in this kind of market?

Well, I believe that anyone can make money in real estate investing in an appreciating market. The true investors will prove themselves in ANY kind of market. Here are a few tips I will offer to investors who still want to participate in the wonderful world of flipping:

• BUY RIGHT! It is true when they say you make your money when you buy. Well, this is CRITICAL in this market. When you are determining what your house will sell for after you rehab it, determine what the market will bear 6 months down the road, then subtract 5-10% to be conservative! Then base your purchase price on whatever numbers will work for you, to be able to unload the property quickly at an attractive list price.
• GET IN AND GET OUT – The rehab should take no more than 4 weeks MAX. The faster you can rehab, the faster you can unload your property. Get your construction crews set up in advance and find out what they’re capable of doing, so you can move fast.
• LIST WITH A REALTOR – Unless you have a huge database of buyers, why go through the hassle of listing the property yourself? If you’re buying right, you should be budgeting the realtor fees in when you sell. Have the agent do the work for you to show the property and follow up with potential buyers. This will free up your time to move onto your next deal.

I believe flippers can make money in any kind of market, as long as they know what they’re doing! More investing tips to come…..