In the real estate market this year, it remains mostly a buyer’s market. Although values have been picking up in the past year, many homes are still available at decent prices with mortgage rates also continuing to hang low.
All of this supports a strong market for people who buy and sell homes at a profit. It’s also a great opportunity for contractors to build some steady income working with such buyers.
What is flipping?
“Flipping” a home means a buyer purchases a residential structure with the intent to resell it at a profit after a short amount of time. The profit is often used to purchase other homes to be sold in the same manner.
In order for the buyer to sell the home at a decent markup, he or she must put more value into the home to justify it. This may involve remodeling and upgrading the structure not only to boost the curbside appeal but to raise the value for the next homeowner, who is more likely to settle on the property as a new home.
Contracting needs
Many investors who are flipping homes need local contractors like Santa Rosa Beach roofing to help refurbish it. Many residences are left somewhat in disrepair because they are often the focus of a bank lien or foreclosure.
More often than not, these homes require the assistance of a professional contractor to make the house dazzling and sufficiently presentable to be resold. It’s a broadly acknowledged fact of life in the real estate industry that any upgrades to a home will add to its value, and this equates to profits for the investor.
Work performed
Working on homes that are destined for flipping is a general contractor’s dream. The work is varied and can range from landscaping to room additions.
It all depends on the condition of the home when the investor buys it. Since most homes purchased to flip are bought at a low price to maximize profits, this gives the investor a certain level of movement with the budget.
That in turn gives the contractor a certain amount of creative freedom to polish the stone that’s a decrepit house into a lovely modern gem of a home.
Time is of the essence
Most investment flips are done with a strict time schedule in mind. This means many hard-working hours in just about every kind of weather.
Jobs have a quick turnover rate; usually something within a few weeks to a month. The benefit for the contractor is that the extra man-hours and labor costs will typically justify a somewhat higher profit margin. High turnover also means more consistent work.
The business of flipping homes has become a huge trend in today’s market. Check out television listings and you’ll find any number of shows that feature professional home “flippers” who are making great money at it.
Most of the people doing the flipping aren’t construction types; even if they’re prone to getting their hands dirty, they usually don’t have the time for it. This is where flipping homes can be quite profitable for the general contractor, especially if it has ready access to heavy equipment.
Originally posted on March 7, 2014 @ 6:49 am