This week we want to discuss the popular strategy of the Fix & Flip that you have seen on TV, Online and in the Newspaper. It’s a hot topic because there is big money involved but there are Pros and Cons to flipping real estate.
Flipping Property Pros – Here are some of the advantages.
- Quick Profit– People flip houses because they want to make money fast. If done the right way, a flip can provide very large return on your investment. These returns can happen in a very short amount of time.
- Build Skills– Flipping a property can further your education in:
- Your local real estate market and working with buyers
- Home construction and design
- Project management, budgeting, and cost control.
- Increase Your Network
- Work with Amelia & Wayne to Build your Power Team
- Lenders, attorneys, contractors, building inspectors, insurance brokers, and other investors
- Personal Pride
- See the potential in making a ugly house into a beautiful home
- Achieve financial results that are better than most other types of investments.
Flipping Property Cons – Here are some of the disadvantages.
- High Risk of Losing Money
- When a flip is delayed, you might lose money.
- Expenses get out of control and can quickly go beyond your budget and take away your profit.
- You might have short term gain taxes if the home is sold less than 1 year and the gain will be taxed as ordinary income
- Property taxes may go up from the improvements you made
- Holding Costs will reduce your potential profit
- Principal Payments if the loan is amortized
- High Short term interest on the loan to purchase and renovate
- Taxes & Insurance
- Utilities & lawn maintenance
- Problems Selling the Home
- Pricing the property too high to try to make some profit
- Homes sitting on the market too long usually end up selling lower
- Do you really want the stress of doing a flip?
- You can eliminate your stress hiring the Luxury Homes Power Team.
Call or Text Wayne at 408-981-5715 to discuss your ideas and plans for a fix and flip opportunity.
Disclaimer: The information provided on this page is for educational purposes only. Amelia Wong and Robert Wayne Mason, Inc. makes no warranty or representation as to the accuracy, completeness or reliability of this information. Please be advised that this content may contain errors, is subject to revision at all times, and should not be relied upon for any purpose. Under no circumstances shall we be liable to you or anyone else for damage stemming from the use or misuse of this information.