Tuesday, October 9, 2007

Do You REALLY Want to Fix and Flip Houses?

Real estate investment and flipping houses has become a hot topic on television and in the media these days, but before you get caught up in the investment fervor, you need to provide honest answers to some serious questions.

First, are you willing to start spending large portions of your life involved in the acquisition, repair, and then flipping of the properties you buy? Real estate, much more than passive investments like stocks and bonds, is a hands-on experience. You've got to look at potential properties, sometimes many of them, before you find the one you're looking for. After finding a profitable house, you will need to pay for the property. Do you have financing arranged? Then you have to repair it, which will involve doing much of it yourself if you want to make the maximum amount of profit. Then you have to flip it, which involves showing the property and dealing with potential buyers.

Next, do you really enjoy the real estate game? That's important, because instead of just buying paper investments from Wall Street, you're going to be embarking on what's essentially a second job when you start buying real estate. If you don't enjoy it, it will eventually be like working a job you hate, but you won't be able to just quit and walk away. Once you've begun the process, you have to complete it or face some potentially disastrous outcomes.

If you're married, are you absolutely certain that your spouse has bought into your real estate investment dreams? This is a crucial question, because if they haven't, flipping homes can be very hard on a relationship. Make sure your communication channels are strong, because there's going to be a lot to talk about during the flipping process--and no matter how well you think the two of you communicate, I can promise that disagreements are going to occur. You can avoid many of those problems by having a serious discussion about the strategy you're about to undertake--BEFORE you begin!

If you answered all of these difficult-but-essential questions with an honest yes, you can safely begin the process of becoming a home flipper. You'll have ups and downs, but there's also great satisfaction in making a profit from a project you had a personal hand in completing. It's certainly not for everyone, but flipping homes can be profitable, and one that's actually enjoyable--if you approach the process in the right spirit.

Pictures of Flip That House with FAUX for Habitat for Humanity project at http://flipthathousewithfaux.com/before.html

Copyright 2007 Jeanette Fisher