Getting yourself involved in the real estate business is a big decision, but flipping homes is an optimal side job that can provide a solid secondary income. Although there are plenty of risks associated with the business, the benefits are equally as rewarding. Take a look at the possible benefits and risks you could reap when flipping the old into the brand new.
Perhaps the most beneficial reward of flipping homes is the return on investment. This comes from flipping in the right market at the right time. If all your ducks are in a row, the rest will fall into place and you can reap huge profits when it’s all said and done.
You’re the Boss
In this profession, you are your own boss. This benefit can harm some flippers who aren’t disciplined or don’t seek help from others. Stay on top of all the pressure that comes with flipping so you can make the property live up to it’s potential.
Being your own boss comes with the freedom to create the home as you see fit in the current market conditions. This freedom helps you learn the business inside and out while getting in tune with your creative side.
The initial money offering to purchase the home is a large investment that can steer some people away from wanting to flip homes. If the home isn’t flipped fast enough or problems arise down the road, your investment could flip your finances upside down. This is a huge potential risk when deciding whether to join in on the flipping business.
Finding a major issue with the home during demolition can be a huge setback in your budget. As you may have already seen on Chip and Joanna Gaines show, these types of issues that are not possible to catch during the purchase stage of the home could cost a big chunk of money in the long run.
There are regulations in place that you must know before you begin flipping homes. Failure to follow these regulations could result in severe penalties that put your investment in jeopardy. According to real-estate.laws.com, the FHA requires “additional inspections and safeguards taken on mortgages applied for on properties that have been owned for less than 180 days.” Not only does the association regulate flipping homes, but there are local laws that must must be abided by as well.
Flip it Quick
In order to see your full return on investment through, you must be quick. Not only do you have to purchase the right home in the right neighborhood at the right time, but it’s imperative that you flip that home in enough time so it can sell when you put it back on the market. A timely flip is a difficult tasks when issues arise and setbacks prevail.
All of these benefits and risks can be overwhelming when first taking the leap into a new profession. Whether you’re on the fence already or newly persuaded to begin flipping homes, be sure to do your research and seek professionals where you see fit.