Flipping real estate works right now, despite of the competition.
Housing prices keep rising and inventory is becoming lower. This effect causes a lot of competition, to buy real estate right now. At the same time there are always deals out there. If you can make cash offers, you are likely to get a discount deal. Not everyone has the cash to buy. In this case, make sure you arrange for financing in advance. There are special programs called fix and flip financing. These loans are specifically for this purpose. Terms may be shorter, ranging from one to five years. But since you are flipping real estate long term financing is irrelevant.
Also, look for foreclosures. While foreclosures are more common during a recession, there will always be foreclosures. Aside from foreclosure, find eager sellers. There are always sellers who want to dispose of their real estate for some reason or another, such as retirement or relocation.
The way the market is now, you might be able to sell without having to spend too much money in fixing a property. Your return may be lower, but the objective is to get in and out fast. If you have more time, than look for properties you can fix up. Aside from fix and flip financing, there is what is called LTC financing. LTC means loan to cost. The financing provided will be based on the future value after repair costs as opposed to the current market value. Housing prices rose 16.9% in 2021. And while no one can say yet what will happen in 2022 or in 2023, many experts predict strong buyer demand and probably more price increases. If you're a real estate investor flipper, this may be an ideal time to buy. Or, if you are thinking of becoming a real estate investor that fixes and flips home, proceed now. If you want to get top dollar, go ahead, and improve the house, and then sell it to someone who wants to be a homeowner, or consider holding onto it and renting it out.
By Gil Zapata
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