To “Fix and Flip” means to buy residential real estate, fix it up (i.e. home repairs and improvements), and then sell it, or ‘flip it’ to someone else. If you’re seriously interested in fix and flip real estate investing, you should go into the venture fully informed and aware that it’s more work than certain television shows might have you believe. It generally takes a few months to find a house, buy it, fix it up, and resell. During all of this time before actually closing the deal with a new owner, you will be spending money. How much depends on the property’s value and how much repair is in order. So what steps do you need to follow in order to achieve success?
In many ways, you will treat the fix and flip process the same as you would when buying new home for yourself. The difference is in setting your goals and limits with a profit margin in mind, and planning your project accordingly to sell.
Fix and Flip Guide
With a proper business plan in place and a little luck and capital, you could find yourself making a healthy profit in relatively little time. If you’re just starting out, consider getting in touch with other professional investors in the area. You can also try wholesaling, or even holding the property. Holding is when you keep the property, but rent it out to tenants. While the profits from this are sometimes smaller, you can generally expect to receive at least a few extra hundred dollars every month for as long as the home is occupied. It will create a steady stream of extra income, with the only real hassles being when you are called in to maintain the property.
Also see our First Time Home Buyer Guide for extra tips.
Or check out our page on Common Home Flipping Mistakes.