Four Things to Consider When Flipping Houses Print
Written by Cris Chico   
Monday, 01 March 2010 18:04

Four Things to Consider When Flipping Houses

For many wholesale real estate investors, the idea of flipping houses can be exciting and profitable.  Indeed it is with the right amount of due diligence to make your hard work successful.  There are many facets to buying and selling wholesale houses.  Knowing the factors that drive the wholesale real estate market internally and externally will produce a higher level of success with greater profitability in the long run.

Some of the considerations for finding the perfect wholesale house to increase your return on investment are:

Competition:  Many wholesale real estate investors think of competition merely as the real estate agents in a given area.  There are other forms of competition for wholesale home sales such as apartments or condos, if the region or society, like some areas of Florida supports more communal living arrangements.  Or, foreclosure and short sell properties touted by banks and lending institutions at lower prices to remove the property from their real estate inventory.  Equally, the new home market in any given area could be considered competition to your goal of flipping homes.  It is vital to look around with a fresh viewpoint of competition in a market.

Value Inflation:  In certain areas, the price of purchase verses the value of the wholesale home is almost unbelievable.  Although it might sound like a great buy to purchase a $350,000 house for less than $200,000, the market flounders in actual resell opportunities until the market for that area aligns with the realistic value of the property.  Seeking to stay away from areas, such as Las Vegas, where value inflation by speculators has caused the market value to soar over the actual value is essential to profitable success.

Price Compression:  Due to price compression, these areas have created a buyers market that can lead to longer retention times before flipping homes and more choices for buyers seeking the best deal.  Faced with so many choices within so many different prices ranges, buyers are able to bid down the price to create a sales potential under your actual purchase price.

Statistically Data:  Research is, without doubt, the most under utilized resource for securing the proper wholesale home.  More than just market indicators, seeking information on local initiatives, such as building green homes, rezoning, and property location, can lead to a better understanding of where to find potential buyers as well increase value of the sale with a proper benefit analysis.

With some careful consideration to these four influences for the wholesale real estate market sphere of influences, investors with have the insight needed to see the warning signs of an unfavorable market selection before proceeding into their first purchase.

As the creator of Virtual Wholesaling, Cris Chico is helping investors realize their dreams of financial freedom through his proven & guaranteed method of finding & flipping properties in hot markets (whether you live there or not)

Last Updated on Monday, 01 March 2010 18:06