Homes condos Montgomery Md Rockville Gaithersburg Germantown, Short sale foreclosure expert: I am "Flipping Out"!!

I am "Flipping Out"!!


I am "Flipping Out"!!  

 

I have been in the Real Estate business for 20 years and have seen the good, the bad, and the ugly. Think 2004-Mid 2007 as the good, 2009 and 2010 as the bad, and early 90's ( recession ) and late 2007 (beginning of the price corrections ) as the ugly. 

 

I am "Flipping Out"!!

 

Now that the worst of the ugliness is behind us, some great opportunities have been popping up in the aftermath. Great opportunities? You bet! I am talking about "Flipping" homes. A home flip is simply purchasing a property that is in need of some "fix-ups", doing the work, and reselling the home for a profit. Sounds pretty easy, doesn't? If you watch cable TV you have probably seen some of the "flipping" shows and it certainly looks easy on TV. NOT!!!

I am "Flipping Out"!!

 

 

Successful flippers have to be able to acquire the home at a low enough price to be able to fix it up and sell it for more than their total investment. The challenge is in the analysis. Let me explain. In a flip, you have to work backwards. First, you must determine the market value of the home after you have completed the renovations. Next, you need to estimate what it will cost to complete the work.  Then you calculate all the additional expenses to acquire the property and sell it              ( commissions and closing costs ). Next, add in a projected profit. Now do the math and see what you can pay for the property to make a profit. If the price you are willing to pay is acceptable to the Seller, you could be on your way to a successful flip.

 

 

Example of a Flip analysis:

 

A house that is in disrepair is on the market for $240K. You believe that the "fixed up" value for the home is $350K based on comps in the neighborhood. Your contractor has been through the home and given you an estimate of $60K to do the renovations. You want to make a profit of $30K. The math would look like this:  

 

Sell for $350KI am "Flipping Out"!!

 

-$60K for renovations

-$12k for renovation over runs (20%)

- $28K for selling expenses

-$30K for profit

-$5K for closing purchase

= $215K

The result is that you must purchase the property that is listed for $240K for no more than $215K.

 

 

I am "Flipping Out"!!

 My best advice to a future "Flipper" is this:

Use an experienced Real Estate agent to assist in finding properties and analyzing the fixed up market value. Your contractor will make or break you. Get referrals from people you know and do your due diligence before you commit to a contractor. If you can find one that is experienced in flips in your market area that would be ideal. Oh, and one more thing, you will probably "flip out" a bunch of times before your "Flip" is complete!

 

 

 

Look for your next flip by searching the entire MLS in real time. Click the link below:  

"I am Flipping Out"!!

 

 

Rick Reed, G.R.I., CDPE- Certified Distressed Property Expert 

Assoc. Broker/Owner "The Congressional Team" RE/MAX

Licensed in MD & Wash DC

8937 Shady Grove Court
Gaithersburg, MD 20877
Cell: 301-742-1172
Office: 240-403-0399 X306

http://www.premiermarylandhomes.com/


Can I help a friend or family member with their Real Estate needs?  You can count on me!

Comment balloon 4 commentsRick Reed • July 11 2011 12:55PM

Comments

Glad you're making lemonade out of a lemon!

Posted by Debbe Perry, 828.439.3084 Morganton/Lake James NC (Real Living Carolina Property ) about 7 years ago

Super post...savvy investor buyers are acting!

Posted by Li Read, Caring expertise...knowledge for you! (Sea to Sky Premier Properties (Salt Spring)) about 7 years ago

Great post and detailed explanation of flipping out there is money to be made in this marker if you know what you are doing.

Posted by Pat Champion, Call the "CHAMPION" for all your real estate needs (Coldwell Banker Camelot Realty) about 7 years ago

Flipping homes is not for the amateur or faint of heart but done with prudence investors can make a profit.

Posted by Betty Knowles, TeamKnowles REALTORS® - Springfield MO Real Estate (Coldwell Banker Vanguard - www.teamknowles.com) about 7 years ago

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