The verdict is in. Flipping homes in Los Angeles can be profitable … if you do it right.
In the early 2000’s many people relied on house flipping to bring in their bread. House flipping is the concept of buying a home at a low price, fixing it up as quickly as possible, and then selling it just as fast to make a hefty profit. When the 2008 financial crisis occurred, the housing market plummeted and no one had money to purchase houses. However, now that the economy is on a steady incline, some people are investing back in house flipping. So the question is: “Is house flipping a steady, reliable way to make money now?”
The key to flipping a house is speed. When you first find a property, pay with cash. Loans can take chunks of time to be approved, and you don’t want to pay unnecessary fees and interests on a home that you will own for a short time. Once you fix up the home, focus on selling it as soon as it hits the market, instead of keeping it until you hit maximum profit. Here are four tips on making the most money in the house flipping process.
Focus on simple repairs. Simple repairs like pouring new concrete, replacing windows, new paint jobs, and new carpet will give the house a valid make-over to impress potential buyers. However, big projects that involved knocking walls down or redoing bathrooms will take more money and time. This will put you at risk for loosing more money.
Avoid loans. Loans are the worst enemy to those interested in house flipping. First of all, loans take time to be approved, which cuts into the time you can use to be remodeling your home. Second of all, loans require numerous costs like interest and lending fees. It would not be a good idea to use your retirement fund either. Focus on cheap properties you can afford, and once you start flipping houses you will be able to purchase more properties.
Sell at high speed. The faster you sell your properties, the more money you can make. If you make an average of $30,000 profit per house, and sell three houses in a year as opposed to one, then your income increased by 200%.
Work at high quality. Do not start house flipping at a rate where you make careless decisions in buying houses that will not earn you money. Consider how long each property will take to renovate, how much money it will take, and how much you can sell it for. Invest in properties that will make you money. Make sure there are people in that area that have jobs and will be able to purchase your property.
House flipping is a good investment, if you play your cards right.