Buy a run-down property in a nice area, usually with a hard money real estate loan. Gut the rooms and rebuild state-of-the-art kitchens and bathrooms. Then sell the home and hopefully for hundreds of thousands of dollars in profit.
All Commercial Finance, even with its many years of buying distressed properties, to rehab and sell, can underestimate the reality of a taking ownership of unknown properties. Especially in "take it or leave it" deals. When there is an ample supply of distressed properties in the market, experienced flippers tend to be more particular in their selection of product. Taking the cream into holding companies for future repairs and sales.
An easy task for flippers with large credit lines like credit lines available through All Commercial Finance.
Although some prefer to title the credit line a "flipping line or rehab credit line", you could just as easy repair the property and refinance it to hold for rental income.
The idea of "flipping" homes appeals to Americans. But for many aspiring flippers, reality does not live up to the expectations created by reality television and get-rich books.
Flippers buy distressed properties in nice neighborhoods with hard money financing. They often run into trouble with contractors to stay on budget for the home repairs or improvements because they failed to use a turnkey repair contract with the contractor. The contractor become liable for cost over runs in turn key situations or their bonding company is on the hook. People attempt to make lavish improvements and don't realize how much time and money the ambitious renovations will really cost. By the time they sell their real estate project, many flippers barely break even. In some cases, flippers lose money. which is why we were able to capitalize on some ones misfortune when they listed their entire inventory of repaired homes on E-Bay. Their hard money real estate loans were in default Sometimes people create a dream property, put it on the market, then watch the home sit for months without exciting buyers' interests. In the meantime, mortgage costs eat into flippers' profits.
When it comes to flipping homes, profits depend on quick sales. Before buying properties, people should learn how to sell them. Or better yet, presell them.
Need Fix and Flip financing? Click Here
Acquisition-Rehab Property Sources
Some experts' opinion is, the current real estate market looks bleak. A weak labor market, rising mortgage rates and high energy prices have caused many American homeowners to become homeless. To others, the real estate markets look ripe for investment.
Foreclosed houses sell at lower prices, helping investors buy properties with less money upfront. In the past, housing prices reflected over inflation - as the market evens out, the mortgage crisis might actually help stabilize home prices in certain areas of the country in spite of the high cost of rehab loans.
With this amount of inventory on the market, there are situations out there that present themselves as profitable ventures even with the cheapest acquisition-rehab loan. Not all of the foreclosures are money-making deals, but with experience, professional investors know when and what to buy, so they can make successful ventures.
As All Commercial Finance has seen, being an individual investor in the real estate market can be a dangerous proposition for the inexperienced. But investors, in tying themselves to a group of experienced real estate players, can use experts' hard-earned knowledge to turn a profit even in the down real estate market. But in any event, a good understanding of what you are getting involved with and understanding that sometime no deal is better, even with great real estate financing, than the deal with speculated profits can be the best deal because you didn't lose your shirt. It is always good to stay out of trouble Fixing and Flipping properties. Get help with a credit line for commercial, single family and multifamily properties.
Sources frequented by All Commercial Finance for finding investment property deals:
www.craigslist.com - just click on "real estate for sale" and type in your city and you'll get a listing of all the properties listed each day. This is also a great source for finding buyers and tenants; just click on "housing wanted" on the home page.
www.zillow.com- although a terrific tool for researching values on specific properties, it's also a valuable tool for finding properties for sale in the markets that may be of interest you.