According to The Columbus Dispatch, House flipping, a staple of the real-estate boom and television networks, is on the way back. More houses were flipped during the second quarter of this year than at any other time since 2010, according to figures released this morning by Attom Data Solutions, the parent company of RealtyTrac.
“Attom found that 51,434 U.S. houses and condominiums were flipped during the April-June quarter, 14 percent more than during the first quarter and 3 percent more than a year earlier. In the Columbus area, 429 flipped homes were sold in the second quarter, also up 3 percent from a year earlier.
“Attom defines a flipped house as one that sold at arm’s-length — that is, the sale involved two unrelated parties — within 12 months of being bought.”
Buying existing homes, fixing them up and selling them at a profit is the easiest way into real estate. Some call it house flipping or rehabbing. Columbus has plenty of opportunities for house flipping. To rehab a house is more than just a new coat of paint. Many houses you consider for rehab are beyond help and may need to be bulldozed. Rehabbing not only may be a profitable enterprise, but is good for a community. No more drug houses with late night visitors and crime affected neighborhoods. You can be a part of that, if you do it right.
We scoured the web to find the best tips for success.
- Don’t overpay – Real estate investor Sal Vannutini said “You make your profit when you buy.” Work backwards. Do your neighborhood research of market values and anything else that could affect price then work backwards to arrive at your offer price.
- Keep your emotions out of it – neither be horrified at the condition of the house nor try to deliver more than the market demands
- Be Low key – start inside not outside. You may want to do a general cleanup of the outside by clearing away any junk. If nothing else you’ll make the neighbors happy.
- Change the locks and secure doors and windows. Hang fabric over the windows.
- Evaluate your Handyman skills. Yes you can save money if you have good skills, but if you are just average, it will show in the work and hurt your resale value. Be smart. Hire a professional.
- Start on the inside with the mechanicals. Fix any plumbing problems, upgrade wiring through the use of circuit breakers. Seal the roof, if water is getting in.
- Estimate costs – Ron Guy suggests working from the same estimate form each time. He doesn’t get multiple bids. He has some contractors he uses all the time. If their bid is higher than his estimate, he presses them to find out why.
- Pull the applicable permits – Not only is it professional, but pulling permits lowers risk and lowers liability. “All buildings must be issued a building permit and a certificate of occupancy before it can be used. During construction, housing inspectors must make checks at key points. Codes are usually enforced by denying permits, occupancy certificates and by imposing fines. Building codes also cover most remodeling projects. If you are buying a house that has been significantly remodeled, ask for proof of the permits involved before you purchase to avoid future liability for fines.”
- Move to the outside – re-roof if necessary, paint, and landscape. The one area of disagreement among rehabbers is Being Low Key. Some want to begin marketing with a sign out front from day one. Even though the house is not ready, a list can be made of potential buyers and given the opportunity, you can show properties you own or have rehabbed.
We think we found all the house flipping tips, but you may disagree. We’d love to hear more tips to share with our readers.
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