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Remodeling to Flip: Can You Do It?

By: Allison Millar, Contributing Writer
In: In the news
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Fixing and flipping property used to be hailed as the get rich quick plan for real estate investors. For some it worked and for some it didn’t. Now that the housing market is improving, you might be eyeing a house with a steep discount and planning to do some remodeling. Can you fix and flip it? According to the Home Buying Institute, research is the key.

Remodeling Savvy Needed!

The key to successful flipping includes several factors–your business savvy, your local housing market, and your ability to pay two mortgages for awhile, according to MSN.com. You also need to:

  • Buy the house at a steep discount–30 percent off or more
  • Have access to remodeling funds
  • Be able to wait out the market for 6 to 12 months or longer, based on the area
  • Find a house with the “right” things wrong with it–cosmetic fixes, such as painting, tile, and flooring

Beware of These Remodeling Projects

Buying a house to flip requires an in depth knowledge of your local market. You want to know what buyers expect, how long houses are on the market, and which neighborhoods are the best to sell in.

As a real estate investor, you have to beware of houses that:

  • Are on a busy street, because they take longer to sell and you have a smaller buyer pool. Also, you have to discount the price, according to Realestateabc.com.
  • Have structural problems, because the extra remodeling eats away at your profit.
  • Have significant design flaws such as an unattractive facade or a tiny lot.

While fixing and flipping will always be around for real estate investors, it’s a little tougher in today’s market. Before moving ahead, do your research to see whether you can buy it right, fix it economically, and market it appropriately.

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