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
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.
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.
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.