Real Estate Flipping 101

A Historical Look

Like a university introductory course, this historical look at real estate flipping 101 will focus on the evolution of what’s come to be known as “flipping houses” as well as concentrate on the current flipping scene and future of flipping properties.

The Past
Turning properties for profit has existed for years, but it wasn’t until 5 years ago that the term ‘house flipping’ broke into mass consciousness. Becoming a regular discipline and topic of conversation, likely occurred for a few reasons:
a) in the past 5 years, some real estate markets have seen huge gains allowing more and more people to buy and sell while markets rise
b) the profile of home makeovers and interior design has skyrocketed with the onset of popular television programs like Trading Spaces, Extreme Home Makeover and Debbie Travis’ Face-Lift
c) as the cost of homes becomes more and more prohibitive, creative investors are seeking new opportunities to gain equity.

Prior to the real estate and flipping craze, savvy real estate investors were turning over properties for profit largely under the radar. Some of these investors would simply purchase a house, live in it, do major or minor updates throughout their stay, sell it and move on to the next property. Other investors would live in a home-base and work deals to turn over land, apartments, condos or houses without uprooting their home life.

Typically those who engage in housing makeovers are those with an entrepreneurial spirit, love of real estate, propensity for risk, and desire to get/make a deal and negotiate. Being handy is also a huge asset for someone who wants to save on labor costs and do most of the work themselves. People in the twenties through to their fifties are those most likely to make money through property flips because they are the most willing to both take risks and uproot their lives for periods of time in order to realize their goal.

The Present
Today updating properties for a quick or medium-term sale is a big business drawing companies and individuals. Some people choose to pour their resources into full-time flipping, whereas others do a flip every 1-5 years as a secondary source of income. Depending on the market and the ingenuity, work-ethic and talent of the flipper, the income generated from flipping can provide significant gains to any personal portfolio.

The Future
Due to the current media saturation of home renovations programs and the like, it’s hard to say whether the craze will grow or fizzle. Each area’s market will have a big impact on this trend and weed-out the bandwagon flippers from the die-hards, while supply and demand will dictate whether real estate investors continue to pour in capital or liquidate their assets.

Ultimately, to protect the interests of your house flipping future, it’s best to concentrate on the buy as well as the other tips and techniques shared throughout the rest of besthouseflip.com. Like with anything, predicting the future is challenging, however, knowing the history and current market for flipping will arm you with enough insight to make the right decision as to whether flipping is for you.