Learn Before You Flip So You Don’t Flop

Jodi’s Weekly Tip For Success:

(What You Need to Know About Foreclosures)

It may appear straightforward and even fun from all of those cable television shows, but you may have a hard reality check if you jump into foreclosures head first with out the know-how.  Sure it may seem like a good idea for someone who has good credit to grab a foreclosure and flip it but the hard reality is that they may be getting in over their head.  In fact, a lot of people blame the real estate market slump on the rise in popularity of inexperienced house flipping in the past years while interest rates were low. 

First off, a lot of the time the investors that make big money off flipping houses buy truly damaged properties that must have massive renovations to bring the house up to fair market value.  The popularity in flipping has created amateurs to buy lacking the appropriate connections or know-how to properly fix the house in a timely fashion. This results in a rapid increase of inadequately repaired houses on the market.   

If you are actually prepared with a team that can handle major home renovations, then someone else’s hard luck could very well be your windfall.  To find out about foreclosures in your area, you can go to the Department of Housing and Urban Development (HUD) website, your neighborhood real estate agent with foreclosure familiarity, or try your luck on sites like foreclosurenet.net that offer free trials. 

Before purchasing a house for foreclosure be sure to check the area of the house and have it inspected.  Although an inspection may give you a decent idea of the repairs needed it is a good rule of thumb to enlarge your budget by an extra  $10-20k for unanticipated expenses or purchase a warranty.  There are also regulations in flipping and mortgage insurance developed by HUD that should also be considered.   

If you have questions contact your neighborhood real estate professional for guidance.

Chapel Hill | Durham North Carolina Real Estate

Chapel Hill North Carolina Real Estate