How To Find A Flip

Flipping houses is becoming increasingly popular. Unfortunately, the popularity of the idea is creating a bit of competition among those who would love to try it out for the first time. Since there is an increase in competition it often serves to raise the costs involved in purchasing the profit, which will only lower the profit potential. However if you find a good property and feel that the deal is a good candidate for a flip you can ask yourself the following questions to help determine whether or not the flip really is a good candidate.

1) Have you had a qualified inspection performed and has it been determined that the property has only minor repairs that need to be made and the landscaping? This is very important because every repair and improvement that needs to be made will spend more and more of your budget. You want to complete the project with as little extra money invested as possible in order to get the greatest return on your real estate investment possible.
2) Is the property suitable for the neighborhood? By this I mean is the property a 3 bedroom house built for families located in the middle of a retirement village or is it a 1 bedroom home in the middle of a family neighborhood? These aren't exactly a good match and can cause problems when it comes time to sell.
3) Can the neighborhood bear the price you need to bring in from the flip? If you are trying to create an upscale home in a middle class neighborhood you setting your self up for a loss on your investment. You will want to find a flip in need of repairs, that is selling for cheap in a neighborhood of better homes so that it will be able to bring in the profit you are hoping to get when it is all said and done.
4) Can you afford to make the changes you want for the house on the budget you have alotted and without drastically changing the structure of the house? This is a big one and one that very often gets overlooked. You usually do not want to start knocking out walls or making additions when flipping a property. That is something that should be left for the new owners. You don't want to make any waves if possible and only make the changes improvements that will raise the value of the home.
5) Can you improve and raise the value of the property enough to make it worth your while in a short period of time? This is another big deal when it comes to a house flip. It takes time and money to make the changes that most "flippers" have in mind for their investment, especially first time flippers. Do you have the motivation and time to stick with it and all the money to cover the carrying costs while you making the changes and improvements?
6) Is the property in a high demand neighborhood, city, etc. for selling properties? 1 more mistake would be buying in areas that are hard sells for buyers. It is often quite easy to find the lower priced properties that look appealing at first however; if you can't sell the property you purchase to flip, it really does defeat the purpose of putting all that time, effort, and money into making the repairs and improvements.
7) Can you do the work or will you need professionals and if so, will it still be cost effective? Be careful that you do not overestimate your abilities in this if possible. It is awesome to think you can put down a hardwood floor with quality work, but the reality of actually doing it is quite another thing all together. Be sure you have a realistic understanding of the potential costs involved in the flip and whether or not the property will still be profitable in the worst-case scenario.

Answer these questions when checking out potential real estate investment and house flipping properties and you should be well on your way to a successful flip, at least as far as the selection of the property goes. You should also find a house to flip that you like as you will likely be spending a great deal of time there.