If I wanted to "flip" a house....?

Question

I'm 23. I know nothing about renovating, but I have friends who do, and I want to learn. how crazy am I to think that I can buy a house and basically gut it and sell it for a larger price?

Answer 1

You have to have a loan to purchase the house as well as a down payment since no one offers 0 down to new home owners any more. That means you need 10-20% of the total cost of the home upfront. Even for a cheap $100k home you would need 10-20 grand to get a loan. Hard to believe a 23 year old would have that laying around.

Not to mention your going to invest 20-30% of the value of the home into fixing it. That means you would need a total of $50,000 just to fix a very small very inexpensive home. At the end of which you should make back 5-10%. All that hard work and all that money and you get 5 grand.

Thats why you need big money to buy a big home thats structurally sound and just need a little done.

Answer 2

The common wisdom is the money is made in the buying end.

You have to wise enough to buy the right house at the right price or you are doomed.

The last several years even if you made mistakes you still made money because prices were going crazy.  No prices are staying the same or in some areas going down.

You had better buy a good house in a good area for a great price.  If you don't ...well I said that before.

Answer 3

Not Crazy! I think it sounds like soooo much fun!! BUT these days the housing market is terrible!! I would be so scared to do it. I love watching HGTV and seeing how they renovate those houses, looks so easy. LOL.... I would be prepared for the worst... have a back up plan!!

Good Luck!! =)

Answer 4

I have a friend who doesn't even speak English who bought and sold houses with his real estate person partner. Together they made about four million dollars in profit. I watched him do all that because I was afraid to do the same. I like to play it safe. He told me that he invested only fifteen thousand dollars to buy the first home. They were lucky because house value were rising about one thousand dollars per day. They bought a house kept it for a year and sold it at a higher price.

Based on the current housing market the prices are going down. I would not buy any real estate unless it is a foreclosed property at a huge discount. I didn't flip homes when prices were going up; don't expect me to encourage you to do what you are planning to do. It would be like swimming against the tides. If you are renting, you could consider buying a house you could live in (even with roommates). Good luck!

Answer 5

the housing market is in the tubes right now, most people say that is not a good idea right now because you will be sitting on the house and the 200,000- 500,000$ loan you have on it, pushing interest. Unless you have the cash to buy it outright in which case why are you doing anything, isn't there a beach somewhere, then you don't want to pay interest for 6 months or more and that's after you finish it.

You don't just gut it you renovate it. Didn't you watch the TV show at least, that's where you got the idea right. You have to make the place better, cleaner, newer. That's why it should sell for more.

Some areas can still sell houses but even they're probaby hurting.