I guess you go tthe FLIP THAT HOUSE or FLIP THIS HOUSE bug.
Do the following and you should be okay:
1) Take 3 years to educate yourself on every facets of the real estate market, not just nationally but also regionally
2) Turn off all of those infomercials that promise easy money, those are crap and people should not invest over $50 for a good product
3) check out http://www.investinuglyhomes.com it has great information on investing in real estate
4) Make friends with real estate investors in your town, also be friends with realtors, brokers, everyone in town
5) Slowly check out properties of interest
6) Save money and find other ventures in order to make money
7) Start buying http://www.investinuglyhomes.com when homea are cheaper.What advice Do you have to someone who is going to flip houses?
SPAM!!!!!
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Remember ';Flip This House'; on A%26amp;E? There's a dark side that such home flipping shows don't show you; in fact, the producer of this show, Sam Leccima, is under invesigation as I write this. According to the AP:
';Now authorities and legal filings claim that Leccima's true passion was a series of scams that included faking the home renovations shown on the cable TV show and claiming to have sold houses he never owned. . . . McGee and others say Leccima's episodes of ';Flip This House,'; A%26amp;E's most popular show, were elaborate hoaxes. His friends and family were presented as potential homebuyers and ';sold'; signs were slapped in front of unsold houses. They say the home repairs 鈥?the lynchpin of the show 鈥?were actually quick or temporary patch jobs designed to look good on camera.';
The only advice I have is to stay as far away as possible from this foolish concept of ';home flipping';. A $300 paint job is a $300 paint job, a few minor renovations will do very little to flip anything other than your wig when you find yourself stuck with a bad asset that is depreciating by 10% or more a year.
There are very few areas going up in value in the US anymore. Because of this, home flipping is no longer a sustainable business model (was it ever?) and can get you into a lot of trouble with debt. I mean a LOT. Ther'es nothing worse than being in over your head with tens of thousands of dollars owed to the bank. Be prepared to have your credit trashed and even your wages garnished if you can't come up with the difference.
You as an individual are up against both desperate home building companies offering deep discount incentives for new construction and a sea of foreclosures glutting up the market, many of which are in excellent condition. There are entire subdivisions that are sitting out there completely empty, some abandoned by the building companies altogether without their interiors completed or driveways poured.
Jim Cramer even suggested ';Plowing over the Inland Empire';, referring to a region where overbuilding coupled with bad loans may require that inventory be destroyed altogether. This is not so far fetched, it's happening in places like Youngstown, Ohio, where declining rust-belt population is forcing community leaders to organize a reduction in housing stock. According to Planetizen.com, ';Neighborhoods that are ';emptying out'; will eventually be converted to greenspace through mass demolitoin [sic] of decaying housing and commercial structures.';
At this stage, I don't even recommend home ownership for those seeking a primary residence in which to live and raise their family anymore. There's nothing more unjust than to be punished with unsustainable depreciation just for trying to put a roof over your family's head, but it's come down to that. Banks don't care who you are or how unfair the situation might be, they just want their money. Once more, for God's sake, STAY AWAY FROM REAL ESTATE.
Like all ventures, you need to be knowledgeable in the business.
Do not just look at the profits and money; look at the time, effort, and cost of doing this.
Repairing and cleaning up fixer-uppers or foreclosed homes can run you many hundreds, even thousands of dollars. If there is dry rot, termites, or electrical/plumbing issues, you have to get it fixed, at your cost.
When the house is ready, you now have to sell it. If you rent it out to get some income, it will be much harder to sell; if you keep it vacant, you are out the mortgage, insurance, and property taxes while it waits for a buyer.
Especially now, with the subprime crises, you would do very well to wait for a year or 2 before venturing out into this field.
I suggest exploring the risks and rewards of house flipping on the internet, just key in ';flipping houses'; into a Google search bar.
The profit is made on the buying end. If you don't buy it cheap enough you can not make it up anywhere else.
So you better learn how much houses are worth before you learn anything else.
You need to have enough money to cover the costs of the house or houses for at least 1 year to be comfortable. Buy in a Buyers Market and sell in a Sellers Market. Find a good local Realtor who will advise you about good buys and about any Market Changes, the Realtor will be able to tell you what kind of properties in a certain area are in high demand and which ones are not.
familiarize your self with house valuations in your area and also familiarize yourself withcost of labor and materials.
keep your credit good, you may need to use it
save up some money, you may need to use it
get to know some people and talk to them. take them out to lunch or have coffee or whatever, Im talking about real estate agents, real estate lawyers, brokers, lawyers, cpas
go house shopping even when you dont intend to buy. talk to regular people about housing. this can give you an idea of what people are willing to pay for and what they are not willing to pay for
be organized. it could savve you alot of time when april roll s around
Advice #1. Be afraid - be very afraid....
Advice #2. No....that's it...
WEll, you're saying 10 years from now you plan to do this - GOOD, that'll give you 10 years to do research. You need to know a LOT about market trends, how to find the worst house in the best neighborhood so you'll be most profitable. You need to know how much materials and labor cost, how to find contractors that won't take off with your money, how to make improvements that will bring the most profit by market segment and home value.
Your best bet would be to intern for a property management company part time. You won't make any money, but it'll be the fastest and easiest way to get knowledge of the business. It'll pay off when you go out on your own.
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