A few years ago, it was common in many markets for real estate investors to buy houses, update or repair them to bring them current to buyer's tastes, and sell at a profit a few months later. For most markets, those days are gone. The problem with flips (and flippers) is that they were primarily in the get-rich-quick game-which may work for a while, but doesn't last forever. You can still make money by applying some of the principles touted on HGTV, TLC, and the like, but it's a slower path to your payday. I call this strategy a "slow flip".
Get a Realtor® who understands your objectives (educate them if you have to). You generally want a property that you can purchase 10% below market due to the fact that it needs repairs or updating to be truly competitive on the current market. Since you're going to live in it for a few years yourself, you don't need to hold to the traditional 20% below market in order to come out ahead. Some people want to
search for themselves, that's not a good idea. Why don't you want to find the property yourself?
- Realtors® have the MLS that's the database of properties for sale
- Realtors® have better search tools
- Realtors® do this every day
- We know the neighborhoods and what's expected in each
- We recognize value more easily than those unfamiliar
- We hear about properties that aren't on the market yet
- We have connections with the professionals you'll need
Once you've selected a Realtor®, get your financing lined up so you know how much house you can purchase. Also, establish your repairs budget which is usually 10% - 15% of purchase price. Based on your financial information and your level of tolerance for making repairs or adding updates, decide if you want an older home that needs updating, a foreclosure home that needs repairs, or a combination of the two.
In my next post, I'll provide some ideas on what changes can be made to improve the subject property.
For answers to all your residential real estate questions in Hampton Roads,
Contact Drick Ward - Exit Realty Central
757-227-9007
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Drick, I have to say there are lots of bargains out there for buyers to choose from. The slow flip is similar to in the old days of buyer buying a starter home. Just clean it up and sell to move up. I hope to see those days come back. It is a guaranteed way to build equity which had been lost in the pursuit of having it all now with zero down!