INVESTORS’ CORNER: Is fixing and flipping right for you?

While those professionals on TV might make, fixing and flipping a house look easy and profitable, the opposite is usually the case for new investors. If you wish to go into the business yourself, consider whether it is suitable for you or not first and before you spend too much. That money might best be invested elsewhere.

While fixing and flipping a home can be a great source of income it can only be a sustainable one if it is done well. Great properties that can be fixed quickly, cheaply and sold off fast are few and far between as are sellers willing to part with them. Plus, even if you do find one that ticks all the boxes, you might face unfavorable market conditions.

The biggest thing you will face during this is locating a property that can be a viable fixer upper much less one cheap enough. Remember, you have to take the costs of repairs into account as well, so the cheaper you buy, the more you can profit once it sells. You also have to wait for an offer which can take time depending on market conditions along with carrying costs and opportunity costs.

If you have an extra source of income, then you can try fixing and flipping as a side job. If you want to make this a full time job, you need to wait for appropriate listings and remain in your day job for while. You will need the stable income in the beginning to fuel your business till it starts generating its own steady income.

Keep in mind that you will also be spending a lot of time repairing the house which will take a lot of time and effort. After that is done, you will need to wait for an offer that can cover all of the expenses you took care of and present a hefty profit as well.

The bottom line is that if you think fixing and flipping a property will make you a millionaire overnight, then this line of business is not for you. However, if you have the income, determination and market insight to do a good job, then this business might prove successful in the long run. Learning basic repair skills can also help you cut down on expenses and make this investment decision more profitable.

It has treated me well over the years.

JC Underwood is with the Metrolina Real Estate Investors Association, which provides education, mentoring, and networking for real estate investing in the Charlotte region. He can be contacted at [email protected]. For more information, visit www.MetrolinaREIA.org.