When you purchase a house for a low price with the idea that you are going to sell it for a profit you are involving yourself in a business called retailing. Some people retail part time and are able to make a great deal of money retailing and have gotten so good at it that they are able to turn over two or three houses a year, all at a considerable profit. People who retail full time often turn over as many as eighty houses a year and usually make a profit of $20,000 to $35,000 on each house.
Not for Everyone
Even though there is the possibility of making a huge amount of money retailing, it isn t without risk. You could end up with a house that you are unable to sell or you could find yourself spending so much money rehabbing the house that you will never be able to get a return on your investment. The trick to success in retailing is to follow a few simple rules.
Increasing Your Chances of Success
When you are looking for a house that you can rehab and sell you want to make sure that you are looking in an area that people actually want to live. It simply doesn t make sense to buy a house in the middle of some slum that everyone is trying escape. When it comes to real estate, the location is key.
Do not close on a house before you have inspected everything. You need to know what type of condition the foundation is in; if there is a termite problem, and what condition the plumbing is in.
In addition to knowing as much about the property as possible you should also make sure that you have done an estimate about how much it is going to cost to rehab the house.
When you are applying for a mortgage for the real estate, you should make sure that you borrow more than you estimate you will need. Having the extra money will keep you safe if the rehabbing costs more than you expect or if the house takes longer to resell than you anticipated.
Don t invest all of your money into the house, always hold some aside. If all of your money is invested in the house you are putting yourself in a position where you need to sell the house quickly. Whenever you need to sell quickly things will go wrong. It will take longer to find someone who is interested in the house, things will slow down the closing, and you won t be able to get what you want for the house.
The current real estate market is ripe with investment opportunities. Remember that the only way to profit in a buyers market is by actually purchasing real estate. Sitting on the sidelines watching the opportunities pass by will only result in the ability to look back at some point and dream of what could have been.
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