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Real estate flipping - is it profitable?

What do you think about real estate flipping? Are apartment flips a good form of investment? Or maybe you have any experience, how much can you earn on flipping?

What do you think about real estate flipping? Are apartment flips a good form of investment? Or maybe you have any experience, how much can you earn on flipping?

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4 answers


waren20

In my opinion, real estate flipping is an interesting form of investment that can be profitable, but under several conditions, namely:

  • good knowledge of average market values of real estate - to be able to distinguish an opportunity from an ordinary offer and be able to predict how much the property can sell after renovation,
  • the ability to correctly assess the potential of a given property - in short - estimating whether it will be easy to sell later and whether there is a risk that we will look for a client for months and have frozen capital,
  • the ability to correctly estimate the cost of renovation - so as not to break even or even worse,
  • the ability to negotiate a high selling price - because profit depends on these skills.

It also matters how you carry out the renovation. Some people over-invest in some fancy decor, and then it turns out that the customer just doesn't like it. It's better to bet on something universal, and cheaper at the same time. If you want to deal with flipping in the long run, it is also worth negotiating prices with suppliers of materials and with the repair team, unless you intend to do repairs yourself.

When it comes to profits, it's different. A friend of mine deals with this, he usually earns 10-30 thousand on such a flip. You just need to know what is worth investing in. As in everything - the beginning is the hardest, with each subsequent flip a person gains experience and is more oriented on how much flipping a given property pays off, so during the first attempts it is worth consulting the offer with someone knowledgeable in this topic :)

In my opinion, real estate flipping is an interesting form of investment that can be profitable, but under several conditions, namely:

  • good knowledge of average market values of real estate - to be able to distinguish an opportunity from an ordinary offer and be able to predict how much the property can sell after renovation,
  • the ability to correctly assess the potential of a given property - in short - estimating whether it will be easy to sell later and whether there is a risk that we will look for a client for months and have frozen capital,
  • the ability to correctly estimate the cost of renovation - so as not to break even or even worse,
  • the ability to negotiate a high selling price - because profit depends on these skills.

It also matters how you carry out the renovation. Some people over-invest in some fancy decor, and then it turns out that the customer just doesn't like it. It's better to bet on something universal, and cheaper at the same time. If you want to deal with flipping in the long run, it is also worth negotiating prices with suppliers of materials and with the repair team, unless you intend to do repairs yourself.

When it comes to profits, it's different. A friend of mine deals with this, he usually earns 10-30 thousand on such a flip. You just need to know what is worth investing in. As in everything - the beginning is the hardest, with each subsequent flip a person gains experience and is more oriented on how much flipping a given property pays off, so during the first attempts it is worth consulting the offer with someone knowledgeable in this topic :)

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Dawid Kędziora

Yes, housing flipping can be very profitable, but you must be aware of what you are doing:

1. First, to make flipping profitable you need to find the right opportunity. You have to look for apartments whose value is incorrectly estimated

2. When viewing potential apartments that you are interested in, you must look at them from the perspective of an investor, not as if you were buying them for yourself. You also cannot be guided by emotions: a nice conversation with the seller, a beautiful view or sentiment due to the location cannot influence the decision to buy.

3. Only buy apartments with market potential. Try to search for apartments that can potentially sell out quickly. It makes no sense to buy a flat, the sale of which will last for months even after renovation. Check which apartments are in greatest demand: you need to take into account the location, size, number of rooms, most frequently purchased floor, etc. etc.

4. The basis for flipping flats is at least a basic knowledge of real estate law and inheritance law. The investor should not be afraid of legal action.

5. Work with intermediaries. A lot of people selling a flat first contact the realtor. That is why it also receives the largest number of flats available at bargain prices.

That's all I remember for now. If anything else comes to mind, I'll add it. Regards.

Yes, housing flipping can be very profitable, but you must be aware of what you are doing:

1. First, to make flipping profitable you need to find the right opportunity. You have to look for apartments whose value is incorrectly estimated

2. When viewing potential apartments that you are interested in, you must look at them from the perspective of an investor, not as if you were buying them for yourself. You also cannot be guided by emotions: a nice conversation with the seller, a beautiful view or sentiment due to the location cannot influence the decision to buy.

3. Only buy apartments with market potential. Try to search for apartments that can potentially sell out quickly. It makes no sense to buy a flat, the sale of which will last for months even after renovation. Check which apartments are in greatest demand: you need to take into account the location, size, number of rooms, most frequently purchased floor, etc. etc.

4. The basis for flipping flats is at least a basic knowledge of real estate law and inheritance law. The investor should not be afraid of legal action.

5. Work with intermediaries. A lot of people selling a flat first contact the realtor. That is why it also receives the largest number of flats available at bargain prices.

That's all I remember for now. If anything else comes to mind, I'll add it. Regards.

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Agata Miód

I will describe here the coming of the American market, but I think that this example also applies to the Polish market.

In the third quarter of 2019, the average U.S. return on investment (ROI) was 40.6% or $64,900 gross profit, according to ATTOM Data Solutions, a leading real estate data company. In this case, the ROI is calculated by dividing gross profit ($64,900) by the purchase price (median $160,000). For an item to be considered flipped according to ATTOM standards, it must be bought and sold within 12 months.

Note that gross profit is the difference between what the property originally cost and what it was sold for. The ATTOM methodology shows that this number does not include renovation costs, which veterans estimate between 20%-33% of the value of the house.

So let's see how much you would earn on a hypothetical apartment flip based on these average gross returns while accounting for your expenses.

You buy a house at an average price of $160,000 with the intention of flipping.
Based on current averages, your gross profit would be $64,900 (or 40.6% ROI) at a selling price of $224,900.
Your average refurbishment cost as 20%-33% of refurbished value ($24,900 in this case) is: $44,980-$74,217.
At best, your calculations will turn out to be the same:
Sale price: $224,900

Purchase price: USD 160,000

Renovation and other expenses $44,980
=
You will earn: $19,920 somersaults (12% profit)

At worst, you lose money:
Sale price: 224,900

Purchase price: USD 160,000

Renovation costs and other expenses incurred (upper limit): $74,217
=
You lose: $9,317 on this flip (-6% profit)

Now you can answer for yourself if it's worth it.

I will describe here the coming of the American market, but I think that this example also applies to the Polish market.

In the third quarter of 2019, the average U.S. return on investment (ROI) was 40.6% or $64,900 gross profit, according to ATTOM Data Solutions, a leading real estate data company. In this case, the ROI is calculated by dividing gross profit ($64,900) by the purchase price (median $160,000). For an item to be considered flipped according to ATTOM standards, it must be bought and sold within 12 months.

Note that gross profit is the difference between what the property originally cost and what it was sold for. The ATTOM methodology shows that this number does not include renovation costs, which veterans estimate between 20%-33% of the value of the house.

So let's see how much you would earn on a hypothetical apartment flip based on these average gross returns while accounting for your expenses.

You buy a house at an average price of $160,000 with the intention of flipping.
Based on current averages, your gross profit would be $64,900 (or 40.6% ROI) at a selling price of $224,900.
Your average refurbishment cost as 20%-33% of refurbished value ($24,900 in this case) is: $44,980-$74,217.
At best, your calculations will turn out to be the same:
Sale price: $224,900

Purchase price: USD 160,000

Renovation and other expenses $44,980
=
You will earn: $19,920 somersaults (12% profit)

At worst, you lose money:
Sale price: 224,900

Purchase price: USD 160,000

Renovation costs and other expenses incurred (upper limit): $74,217
=
You lose: $9,317 on this flip (-6% profit)

Now you can answer for yourself if it's worth it.

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OpenAI BOT

Personally, I believe that property flipping can be a profitable venture if done properly and managed well. It is a good form of investment because it allows for a quick turnover of capital and generates profits. Of course, there are also certain risks associated with this type of activity, such as unexpected renovation costs or issues with a quick sale. People with experience in the real estate industry can successfully make money from flipping, but for beginners, it is worth conducting thorough market research and seeking assistance from specialists.

Personally, I believe that property flipping can be a profitable venture if done properly and managed well. It is a good form of investment because it allows for a quick turnover of capital and generates profits. Of course, there are also certain risks associated with this type of activity, such as unexpected renovation costs or issues with a quick sale. People with experience in the real estate industry can successfully make money from flipping, but for beginners, it is worth conducting thorough market research and seeking assistance from specialists.

Machine translated


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