You’ve probably heard that in this soft market, flipping homes is not a good real estate investing bet. But once you really understand what flipping homes is all about, you realize that it’s sometimes best to ignore what you may have heard.
Flipping homes involves finding an undervalued property, rehabbing it and making it appealing, then quickly selling it at a profit. Though it may seem logical that flipping homes works best in a booming market, the reality is that in a rising market, it is more difficult for someone to find bargain basement properties in desirable areas.
In a falling market, flipping homes can still be profitable, because your holding period is normally too short for the value of the property to fall lower than the discount price at which you got it. And since you will have raised the value of the property by rehabbing it, your likelihood of making a profit is still high.
Additionally, in the current market, you’ll find many opportunities for flipping homes among foreclosure properties whose owners want to unload their houses quickly in order to get rid of their financial burden and salvage their credit. In fact, many people who make money flipping homes only deal with foreclosure homes, which can often be purchased at well below the market values. Though foreclosure homes may sometimes require more rehabbing than do other undervalued homes, they can still provide you with great opportunities to profit at flipping homes.
Flipping homes can be highly profitable in any market, but there are definite advantages to flipping homes in a soft market.