What is House Flipping?

Posted by admin on March 8, 2010 under Real Estate License Basics | Be the First to Comment

Low prices and interest rates have created an ideal climate for real estate flipping. Flipping is the process of purchasing a distressed home, renovating it, and reselling it at a profit. The housing crisis has created a surplus of inventory, a great deal of which are lender owned homes that are available at prices well below the true value of the home. There has never been a better time than right now to find amazing homes at even better values. As the current administration tackles the high unemployment rate and the consumer confidence continues to increase the rebounding real estate market will be ripe to sell your investment property at a sizable profit.

The abundance of lender owned properties means that there are many homes, some in good condition, some may need a great deal of work. In any condition the prices are below market value. If you have a real estate license, then you are in a perfect position to find these homes. That along with the knowledge of the market that comes from earning your real estate license could potentially make you a large amount of money as the housing market turns around. The flipping process of purchasing properties at the lowest possible prices, refurbishing them and then marketing and selling the home at a profit holds potential for income at every step for someone with a real estate license.

In recent history there have not been better bargains in housing, especially for those people who have maintained their credit ratings. Exceptionally low interest rates and home prices make the overhead costs of carrying an investment property much more affordable. If you have a real estate license, then you know that carrying too large of a mortgage on an investment property can eat up any potential profits very quickly if the home does not sell within a month. Many flippers have been caught in this trap, counting on a quick sale to make a profit. To be successful at flipping a home, a good deal with a low interest mortgage is crucial. If you have to hang on to the property a month or two, you want your profit margin to be able to support that.

Although unemployment rates remain high, consumer confidence is at its highest level in more than a year. As the economy continues its recovery and the unemployment rate drops, more people will be looking to purchase homes before interest rates and home prices go up. As the market is stimulated the housing prices will continue to increase, creating more profit for you, including higher commissions if you have your real estate license.

Most wealthy people have acquired a considerable amount of that wealth through real estate investments. Real estate has created more millionaires than any other industry in any economy. The recovering housing market offers genuine opportunity for real estate flippers to dive in and make some real money, and if you have your real estate license, the possibilities for income are unlimited.