A lot of people sell their property because of its condition or they want to relocate or for some other reason, but the concept of flipping your home is a much more advantageous concept rather than wholesaling homes. Apparently it might seem to be a very simple act wherein an investor buys a property that is distressed, renovates it and sells it off at a high price, bagging in a huge amount of profit.
However, when you add on the expenses on the renovation, you will notice that after all it is not a cakewalk. It is hence that a lot of experience is required to carry off this process of flipping homes efficiently. BrianFerdinand the COO of Vacation Rentals has a great understanding of the art and math of flipping homes, which is why has given vital information of how to go about it, in his blogs very clearly. His emphasizes that just the availability of cash is not important in a successful flipping of home, if this goes into the hands of an inexperienced investor, the entire process might turn out to be a disaster.
The flipping of homes can be done in two different ways: one is by purchasing a distressed property at a discounted price and then selling it in a rising market, the other way is to purchase the property at as low price as possible and then make the renovations by yourself with the help of architect and other people; and finally sell it at a high profit rate. This method is known as the ‘fix and flip’.
The second method is a more expensive one, however, if the buyer can take up the repairing work all by himself then a lot of cost can be cut down there. But the disadvantage of this method is that it creates a lot of pressure on the buyer, as he has to keep in mind all the little details that need to be attended to. It is because it is a sort of a one-man show, it consumes huge amounts of time and energy, and this becomes another demerit for the process.
The easy availability of networking and finding partners has made the process of home flipping much more accessible to many more people as compared to earlier days. It is no doubt that BrianFerdinand, the financial consultant, is thus promoting this process so strongly. His 15 years of experience makes him an expert in the understanding of real estate investments, and it is by this confidence that he calls the process of flipping homes an art.
It is found that it is the investor’s ability to add value to a property upon which the flipping largely relies; after all, the renovations are done with the intention of raising the value of the particular property. So, any investor in a distressed property needs to be very smart and innovative in order to hook the best deal for his property and enjoy high profit margins.
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