House Flipping Real Estate Investing
House flipping is a real estate investment technique used to generate profit in a short period of time. The goal is to purchase distressed property significantly under market value, make necessary repairs and sell the house within 3 to 4 months.
Even in today's shaky market, house flipping can be a profitable venture for real estate investors. In fact, there are more opportunities available now than ever before. With the influx of foreclosure homes and bank owned properties, there are thousands of distressed properties selling below market value.
One lesser known way to profit from house flipping is to purchase real estate owned properties from private investors. Investors who specialize in REO properties oftentimes purchase entire bank portfolios. It's not uncommon for these portfolios to consist of hundreds of foreclosed homes. By purchasing in bulk, investors buy properties at wholesale prices.
Bank owned homes are foreclosure homes that did not sell at auction. Once returned to the bank, creditor and tax liens are removed and the houses are given a clear title. Banks normally sell REO properties at approximately 3-percent under market value. However, when investors purchase these properties at wholesale, they buy them at around 30-percent under market value.
Most investors who purchase distressed properties in bulk do so with the intent of quickly reselling the real estate. They may offer houses for 15- to 20-percent under market value; perhaps even less. Purchasing REO properties through private investors can make for excellent house flipping investments.
Investing in houses for the purpose of house flipping can be risky business. It's important to engage in due diligence, thoroughly inspect the property and determine future market trends in the area where the house is located. If you have never engaged in house flipping before, you must educate your self about the process and all that is involved.
House flipping is of particular interest to people who enjoy do-it-yourself projects. However, the downside of house flipping occurs when people procrastinate and end up taking months or years to rehab the home. If you aren't motivated to do the work or can't afford to hire contractors, house flipping is probably not the best investment choice for you.