It’s that time in the housing recovery when everyone declares that house flipping is back! While flipping is re-emerging nationwide, it is happening most in California, where home prices have risen sharply over the past year. According to the Wall Street Journal “In California, the number of homes sold in recent months that had been flipped–or bought and resold within six months–has reached the highest levels since late 2005”. Rising home prices have fueled the return of professional investors, who are often paying cash and in many cases working with foreclosures and major fixers that scare off regular buyers. House flipping also attracts many amateur flippers, who often tend to get in over their heads.

There are many pitfalls that are associated with flipping houses. Overestimating your abilities is a common problem. Many people who make the decision to invest in real estate by flipping houses haven’t actually set foot in a hardwood store and compared prices on relevant building materials recently enough to create accurate estimates when it comes to the price of things. If you’re working on a fixer-upper, the budget starts to grow when you consider the renovations you’ll need to make. According to most experts, you should add 20 percent to your estimate for the final cost. If you underestimate, you get stuck with unexpected bills. You need an experienced developer to establish a realistic budget from the very beginning.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The real money in house flipping comes from sweat equity. If you’ve got to pay a professional to do all of this work, the odds of making a profit on your investment will be dramatically reduced. Finding the right contractor is crucial. With large numbers of scam artists posing as contractors, homeowners should be suspicious if a contractor pressures for a quick hiring decision, accepts cash only, or wants to skip the building permit.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

To be successful, you need to be able to pick the right property, in the right location, at the right price. You also need to understand the applicable tax laws and know when to cut your losses and get out before your project becomes a money pit. House flipping can bring significant profit in a rather short amount of time to those who carefully plan the process and establish realistic budgets for doing so. If you are interested in this sort of real estate investing contact Phillip Braunstein to plan your strategy for flipping houses carefully from the beginning in order to insure success. Having managed the construction, finance, and development of several multi-million dollar projects, Phillip has the knowledge and experience it takes to find the right properties and quickly turning them around for a profit.  Pictures portrayed in this blog are from a real project completed in 2012.