{3:00 minutes to read} My last blog discussed “flipping” a property, a popular way to invest which allows you to create profit and cash flow in a reasonably short time. We talked about acquiring the property and financing in Part 1 of this series.
In Part 2, we are going to touch on two other aspects of “flipping,” renovation of the property and making a profit.
Renovating
Sometimes a property can be sold as is and still make a profit. However, if the property is going to need work, you will want to know how much work it needs and what it will cost. Getting an estimate on the renovation work is an important part of the process. If the renovation required is going to substantially reduce your profit, you may want to bypass that property.
In addition, how much time is it going to take to complete the renovations? If I’m going to flip a property, I want to go in and out of the property quickly. I’m not interested in something that’s going to take me a year to work on. Besides my money and interest, my time and attention are tied up. If it takes too long, then to me, it may not be worth it.
Making a Profit
As a property flipper, you will want to make sure there’s a lot of equity in the deal. Worst case scenario, the market where you are may experience a market correction (crash). Property values may stay the same, but they may also drop. If you can’t sell right away and have to hold it or rent it out, can you afford that?
When flipping properties, the ultimate goal is to be in a strong market where people are looking for properties and have someone else to buy it. It’s not quite that simple, but if you are in a market where there is a housing shortage, like in Brooklyn, if you bought a house on discount, you should not have a problem selling it and making a profit in a reasonable time.
As we said at the conclusion of Part 1, flipping properties is definitely not a walk in the park. Everything has an element of risk, so you know going in anything could go wrong. You have to expect the best but be ready for the worst.
If you are interested in flipping a property or if you need help or partners/investors, please feel free to give us a call.
Mendy Lipsker
Mendy Realty Inc.
822 Montgomery St
Brooklyn, NY 11213
Phone: 646.662.5454
email: info@mendyrealty.com
website: mendyrealty.com
