It would be fair to say that the term “flip” has multiple connotations for people. For those involved in real estate, it can have very lucrative meanings indeed.
In some areas of the country, flipping involves some serious profit. One only has to ask Al Hartman about the situation in Houston, where he is greeted with a flipping proposition seemingly on a day-to-day basis. Sure, there are some which are there to be ignored, but on a lot of occasions it pays dividends to take that elusive leap of faith.
To highlight just how you can profit from flipping in Houston, we are today going to take a look at some of the best strategies. Armed with these, you should be able to accelerate your real estate investment and really make some headway.
Method #1 – Buying the property that needs fixing before selling
This is the most popular form of flipping and the idea is to purchase a property that clearly needs some work. The idea is for you to invest as much renovation work as possible, before relisting it on the market at a much higher value.
There is most definitely a fine line to be had here. On one hand, you want to perform sufficient renovation works to attract buyers. On the other, you can’t go overboard so that you price the property out of the market that it is currently sat in.
The other caveat with this method is that you should factor in a sufficient period to be paid back in. In other words, you can’t expect to sell straight away, and you need to budget accordingly.
Method #2 – Buying the property, fixing it, refinancing it
This next method is a slight deviation on the first one. This time, it’s all about purchasing a property, performing the necessary maintenance, before refinacning it now it is worth more money.
Of course, there are a few actions that you have to make sure you get right in this case. You have to ensure that you are renovating the property to a standard where a valuer is going to appreciate the change, and ultimately increase its value for the refinancing. If this doesn’t occur, the whole strategy can fail quite quickly. In other words, don’t expect to replace a photo on the wall and expect the price to skyrocket. Usually, significant changes are needed.
Method #3 – Buying the property before it’s built
This final strategy varies widely from what we have looked at so far. This time, it’s all about buying the real estate before it’s even finished.
There can be some huge sums of money to be made here, but at the same time there is an element of risk. If there happens to be a downturn in the economy, it stands to reason that your investment might be worth less than you paid. As such, this can be one method that might only be appealing to experienced investors.