Flipping Houses and Fortunes?
With the recession and depressed housing markets, we’re in a time period of great opportunity for those with the financial strength to Buy. If you’re planning on building a real-estate portfolio and becoming a landlord, now is probably the best time to do it.
But there’s another type of real-estate investment out there, and it’s one that has been popular for quite a while now: “flipping houses.” The basic premise here is to buy a fixer-upper (often using large amounts of debt) and then use your spare weekend for a few months to make repairs before selling the house for a profit. While the stagnant housing markets we’ve seen recently might make this iffy on the short term, anyone who’s willing to landlord and wait a few years may stand to make a killing with this.
Of course, that assumes they can do it. It sounds like a great idea. After all, how hard could it be to fix some leaky pipes and paint a few rooms? All too often, however, house-flipping hopefuls find themselves in over their heads dealing with more severe problems than expected. Soon they’re sinking far more time, money, and stress into the project than they ever thought possible.
It’s entirely possible to do this well, of course. Just be careful. Fortunes will be made from this housing market, but fortunes (and houses) will also be lost. And if there’s too much debt in an investor’s house-flipping strategy, those lost houses might even include their own.
Thanks for reading,