How to flip a house using loan

"Flipping" a house consists of buying a run-down property below market price, increasing its value somehow, and rapidly re-selling it for a quick profit. This is different from development investing, in which the buyer purchases a property under development, then sells or rents the unit when it's ready for occupancy. If you play your cards right, you can make 5.000 - 20.000 € per flip, and do it in under 90 days.

1) Familiarize yourself with how to buy a home or condo. If you've already done that, then you already know the process and it's second nature. If you have not ever purchased a home, then consult with a Realtor. There are a few steps involved when purchasing a home so you need understand that process, such as: placing an offer, getting a mortgage, removing conditions and taking possession.

2) Educate yourself about the real estate market in which you're investing. Read magazines that often have articles about real estate. The housing market is like the stock market. It has both "bull" and "bear" cycles. The difference is that the housing market can take years and years to switch from one cycle to another. All that simply means is real estate might either be in "high demand" or "low demand". After talking to at least 3 realtors and doing some investigation, if you find that the market is in low demand and everyone and their dog seems to be trying to liquidate their homes, these kinds of market conditions would make it more challenging to flip a home. Wait to buy until there's a fairly bearish real estate market.

3) Obtain a loan for at least several thousand dollars more than the price of the property you wish to flip. You'll need this money for repairs and improvements. Negotiate a purchase of the property, and buy. In the offer be sure to have multiple ways out of the contract. Have multiple ways out of the contract. The most common is simply "subject to financing by x date". If you can't make the financing by then ask for an extension on the condition date.

• A home with room for improvement might have a run-down yard, old carpet, a good spot for a carport, or other things that can be fixed with a little money and some hard labor. These types of fixes often provide an excellent ROI when flipping a home.
• Some people look for distressed properties. Those are ones that the seller is "desperate to sell" for reasons such as: divorce, bankruptcy, death, poor condition of the property, late on payments or other.

4) Work on the house to quickly and cheaply improve it. Repaint, tear out old carpet, touch up old fixtures. The key is to make improvements, often merely cosmetic ones, that make the house look much better but won't cost you too much.

• Typically cleaning, paint and plants are the cheapest way to boost the value of a home. A deck also raises the value more than the price of the deck. Remodeling kitchens and baths typically do not raise the value of the home enough because owners tend to pay too much for the remodel. Replacing electrical and plumbing fixtures and fixing anything broken is also a cheap way to get a good boost in home value.
• Seek out the cheapest labor you can find (college kids, or even yourself) and have the property immaculately cleaned up and repaired.

5) Sell a home for a higher price than the one at which you purchased the property. Any annoyances or expenses with the property are now the buyer's problem, not yours. Pay off the loan, deposit your profit, and take a vacation.