Living Flipping Houses

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Repairing houses for a living, or as others call it flipping houses, what is this all about? I know most of you or if not all have some type of idea as to what flipping houses is all about, right? Okay, well I'm going to give you may definition as to what I believe buying and selling house is. My definition of buying and selling houses, is to find a house in any location, and that location could be a city or town. Make an offer to purchase the house, and if your offer is accepted then the house is yours.

You spend thousands of dollars on repairs, after the repairs are completed, place the house for sell. That's it you have flipped a house. Well, that seems like the case, but not so fast, there is more to it than that as to what my simple definition looks like above. I will go into more details, as to what is really going to happen, when you are making a living buying and selling homes.

Financial institutions are in the business of loaning funds or monies, on sound real estate or business ideas. If you can show or demonstrate to any financial institutions, that you have the credit, collateral and or the income to repay the debt on any real estate loan, then your chances of getting that mortgage or loan has increase immensely.

It's almost a guarantee that you are going to get your financing on almost any project you set out to achieve. Remember, I said almost guaranteed, because there is nothing that is 100% guaranteed, only two things I know that are guaranteed and they are death and taxes. Just remember that, when someone tells you that they can guarantee you anything. This leads me into our next segment regarding credit.

Credit and how do you attain a good credit FICO score or credit rating, so that you are able to get a mortgage to flip houses for a living. First to get credit you have to establish a debt with some merchant that are selling goods or services, and you make the required monthly payments in a timely fashion. Making these payments the merchants will report you habits of paying on time as the contract with them has stated, then the agencies that are responsible for scoring your behavior of being a good paying citizen and they would score you accordingly.

Where did the FICO score get its' name, it came from company known by the Fair Isaac Corporation, they created this program. Now this FICO score can affect you chances of getting most if not all major items, such as cars, houses, boats and financial loans if you have a negative FICO score. The FICO score has a range between 350 to 850.

If you FICO score is on the low end, which tells the financial institutions that you are a low quality risk. That means that the chances of you paying back their monies for a loan is not very good. So you probably would get denied a loan to purchase a house. But on the other side of that coin, if your FICO score is very high your chances of getting a loan have increase and you may be able to purchase that house to live in. This is what credit will do for you, if you want to flip houses for a living. Now that you know or have the credit score to purchase the houses to flip, do you have the income?

I think that everyone knows what income is and how you attain income. You attain income by earning a living at a some type of employment, that pays you a weekly or bi-weekly pay check, because you did some work for that particular company. But your income has to meet certain requirements, before you can attain a mortgage, to purchase a house to flip earning a living. There is an income to debt ratio in real estate or financing for all that matters and it says that if your debt to income debt ratio is greater than 38% of your income you cannot purchase any real estate to flip.

There is a minimum income to debt ratio of 33% to a maximum of 38%, of debt or bills that is counted against your monthly income. So if you are earning lets' say $1,000 income per month, then you can only at the minimum level have your bills to exceed 33% percent of your income.

So if you bring home before taxes $1,000 dollars of income your total minimum amount of your bills should not exceed $330.00 dollars of your income. Now real estate financial officers and or the financial institutions loan officers, they will stretch that debt ratio to 38% of your income, which would be the maximum amount and that would be $380.00 dollars of debt or bills you could payout.

If you are over the maximum amount of the debt ratio, there is a very good chance you may get denied a loan or mortgage, because your expenses are just too great for the financial institutions to take a chance on giving you a loan or mortgage. Now this is just an example, but you can use those percentages towards your on income and this would let you know if you can proceed to flipping houses for a living. I told you that there was more to flipping houses for a living. So lets' move on to where should you purchase these homes and what are or are not the best locations.

I'm a true believer in that locations does and still is the number one issue that you should be aware of, because even though you are flipping houses for a living people like to live in a nice decent neighborhood. Who wants to live in a neighborhood that is not safe or does not have any appeal to the eyes. People like to have proud of ownership, even if the home were in some terrible location. I know that you probably can get some good deals on houses in terrible neighborhoods, but do you want to risk your hard earn money in a location that may or may not sell after you have repaired the house.

I see many properties today, that have been repaired by some investor and they are waiting months on end for this property to sell. The houses are very nice now, but they are located in a very terrible or bad neighborhood. Location where to purchase your flipper house or home, it is going to be your option, but to take a chance on a not so favorable neighborhood, is not my best option. I would probably keep looking for a better location. I was taught that location, location and location is all that matters when purchasing a house for my family and also flipping houses for a living.

Now that you have found the location to target to purchase a house to flip, what kind of house do you look for and that my make a great investment to flip and make money on. I would say that you look for the worst house in the best possible neighborhood, the one that has over grown grass, paint falling off the walls and just looks like it does not belong to that neighborhood.

Drive around the neighborhood and do some market research on the different houses in that particular area, this will give you some mental ideas as to what the neighborhood is about and the real estate values for that area. Driving around gives you a chance to check the neighborhood out for any major glaring problems, and those problems might be the main reason that this particular property was left in such condition.

Also you can get a feel for the neighbors that live there, is there any proud of ownership or is every other home is such bad or terrible condition. If the majority of houses are in bad condition, then you may want to reevaluate purchasing a house in the area to flip and make a living.

If you think you have found as the clichés states "a diamond in the ruff" and all of your tests regarding locations and neighborhood are solid then you may have found a great deal to make an offer to purchase. Just remember that there is no rush into purchasing a house just to flip a property, because you could lose money, and this is not what you want to do. Money is hard to get and it is very easy to spend on something that should have not been purchased in the first place.

How do you know how much, is it going to costs you to repair this particular house, so that you can get your ROI (return on investment). If you know how to do measurements of square footage, then you can do the measuring rather easily yourself. The local home improvement stores in your neighborhood they will have measuring devices or products that can help you in that area even if you think that you are not well versed in measuring a penny.

Do not be afraid to get involve with the repair process, because this is where most investors lose money, because they let someone take control of the project and when you do that things do not get done in a timely manner. The time that is wasted is going to cost you money.

When repairing a fixer upper you do not have to purchase all of the most expense products to put into that house to get it looking like a very nice house ready for sell. There are things you can do yourself, that can and will save you a lot of money, only if you try. But even if you are not the home building type, you could hire a pretty good contractor at a reasonable price to do the repairs for you. If I were you I would make sure that you oversee every repair, because these contractors get lazy sometimes, taking longer than the job requires. Just be aware of this.

I would say that if you have $20,000 to $30,000 you can do a really good job at restoring these fixer houses to very good livable condition. I'm talking for experience. That $20,000 to $30,000 dollars, could also included your contractor and or handyman to do the repairs at a reasonable costs. Make sure you stay on top of the project, because people like to take their time on repairs and time is money, remember this cliché'. "time is money". Do not let the contractor or handyman waste your time, when you are paying for their service.

Now that the property is in your control, you have just purchased a fixer upper in real estate terms. It is time to find a good contractor or handyman to complete the repairs for your house. I would check with someone I know that has had someone do good work for them at a reasonable price, or I would like for those services that have contractors or handyman recommendations and only hire those individuals or companies. Again, if you have contracting home building experience then you could do a lot of the repairs yourself and save a lot money on the project.

Also you put ad in the local papers or internet looking for contractors or handyman that could give you the best price. Interview each one until you get a good feel regarding that person or contractor. Asked for references regarding their past work or pictures of their last job that they have completed. Do your research on these individual, because you are now the employer, you want to make sure you hire the best person or company for the job.

Check with your local Better Business Bureau and see if they have any recommendations regarding contractors or handyman in the area. Also you could check to see if there are reports of bad contractors or handyman as well. Also you can check with your local city hall regarding contractor having expired license or their license being revoked because complaints.

After all the work has been completed it is time to list the property for sell. I would conduct the same procedures as to how I found the building contractors. I would interview each and every real estate agent, asking a lot of questions about how they are going to get my property sold. Questions like, are they going to do any open houses, are they going to spend any money on advertising my property and any other questions that may come to mind. The real estate agent is the person that is going to help you sell your property and put money in your pocket.

Make sure that this agent loves what they do, because real estate houses is a tough job and things do not happen very quickly. So be prepared to wait, but if the property was in a good location and the repairs done at top quality, then your property would get sold. Also be aware that if your property is on the market too long, it may be because the price is too high, you may want to drop the asking price $10,000 dollars to get buyers interests.

Well this is how you flip houses for a living, it's not some fast quick process, but if you become good at it and it is done correctly, you can make a ton of money.

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