Value Bomb: Flipping Houses
Quick value bomb for you about flipping houses. I get a ton of buyer inquiries about doing fix and flips; so, purchasing a property, fixing it up, and then quickly flipping it for a profit.
A lot of TV shows these days really sensationalize it, but it’s incredibly difficult to do especially here in coastal Orange County for two main reasons: A) it’s highly competitive and B) there’s usually always an end-user buyer around the corner that’s willing to pay more for the property, than you as a flipper or developer.
So realistically, getting the property at a low enough price to where it pencils out on a short term gain is nearly impossible.
A better strategy for flipping houses is to buy a property that is undersized for the lot. For example, a small home that has room for livable square footage expansion. Hold on to it for a few years, maybe rent it out and then when you’re done with it as a rental, fix it up at that time, add on that square footage, and capitalize on the delta between what it costs for you to add the square footage, and what the going $ rate per square foot is in the community.
That’s where the magic really happens!