In Appleton, Green Bay, The Fox Valley, or in ANY area of the U.S., you can make money "flipping" houses.
Good. Now that we've gotten that out of the way the fact that you "can" make money flipping houses in this day and age, let's talk about how it actually works.
But Jacci, Aren't You A Realtor? What do you know about flipping houses?
Good question. Actually, I know a lot! Yes, I am a licensed realtor in the Appleton/Fox Cities area, and I spend a lot of time, energy, and hard work helping people to sell their houses quickly and profitably. But, I am also an investor ... and an educator! I get a ton of juice out of finding a property that needs work, fixing it up, and selling it. Especially for a profit! And I get even more excited teaching people how to do it themselves. As a matter of fact, I started my real estate career as an investor! I was a Realtor in IL for a few years working with the investors and flippers before moving back to WI and surrendering my license. I only decided to become a Realtor again after the state required me to broker our own sales with all the flips we were doing! Today, I get to use that knowledge of selling FAST to help my clients as a Realtor as well.
What's the difference between a straight flip and a rehab?
There's a couple of different categories we can talk about when we refer to flipping houses:
- Wholesaling. Will talk more about this in another blog post.
- A "Straight Flip." This is when you buy a house and almost immediately put it back on the market after doing minimal to no improvements.
- A "Rehab". In this situation, you find a house that needs significant repairs, buy it as cheap as you can get it, fix it up, and sell it to make as much profit as possible!
Ok, hotshot, since you know so much about this, what do YOU recommend?
Glad you asked! The majority of the deals that I do are rehabs. Obviously "rehab" is short for "rehabilitation", which is what we are doing to the house before we sell it. And let me tell you, some of these houses desperately need it! But the financial reward can be very healthy if you know how to do it right.
Another reason why I do mostly do rehabs is because it is far easier to develop a system, and stick to that system to get results. As many of the great rehabbing gurus say, "you have to stick to your numbers." This might sound a little foreign to those of you who aren't in the investing world, but you'll understand that the logic applies in any aspect of life that involves finances and money. Basically it means developing a budget and trying not to deviate from that budget as much as possible. The other reason is the appraisal. If I am just turning around and reselling a property I just purchased, with no rehab, to an owner/occupant (someone who will live in the home), the appraiser is going to question why I bought it for less than I'm immediately selling it for. This can snag the plans of profitability.
So can I just walk off the street and start rehabbing?
Sure, anybody can do it! However, I strongly recommend getting some GOOD LOCAL education before jumping into rehabbing, flipping, or wholesaling. Let's just say a little training can go a long way- not only do you get a chance to learn from the mistakes others have made in the past, but you also grow your network when you engage with other up and coming investors! And why stay local? Because getting educated by someone who is already working your market will keep you current on the very specific intricacies of that market. Of course, investing in Milwaukee or Chicago will be way different than flipping houses in Appleton, Green Bay, and the Fox Cities, because of local market conditions and the economy.
Want more advice on how to start investing in Real Estate? Visit us at the Appleton REIA (stands for Real Estate Investors' Association) (AppletonReia.com) and start launching your investing career today. There's a LOT of information given for very very little fees! We find that a lot of people only find us AFTER they have gone and spent TENS of THOUSANDS of dollars on some TV guru's package. The gurus do not live locally and have ZERO market knowledge, but they get people to spend an average of $20,000 on their programs!! Skip all that...join us in town and learn from those who are already successful in the markets where you live. We have members who drive in from all over the state, Oshkosh, Fond du Lac, Manitowoc, Two Rivers, Sheboygan, Wausau, Waupaca, Stevens Point, etc etc.... ALL OVER! If you're interested in learning to flip as your new business, JOIN US. Our main meeting is the third Tuesday of every month. The calendar is on the site at AppletonREIA.com
We can start helping you right NOW with your basic questions...just type them in below to get the conversations jumping!