A true investment opportunity with real estate

Are you looking for a way to use real estate as an investment? If so, we have an idea that you will want to consider — flipping homes.

How It Works

When you flip a home, you purchase a home for the lowest price possible. This will most likely be a home that needs a little TLC. Renovations shouldn’t cost a lot of money, but you’ll want to do enough to increase the value of the home. This will help you sell it for much more than you paid for it.

Once the renovations are done, you can sell the home for market value with its improvements. Depending on the amount you spent on the home, the cost of the renovations and the value of the home after repairs, you could end up making a few thousand dollars from the sale.

Money to Invest

If you don’t have the cash to invest in real estate, don’t worry; you can still take part in this opportunity. With a 203k loan, you can borrow money for purchasing the home plus the cost of renovations. When you are approved to use a 203k loan, you will work with your loan officer to find a contractor and fund the renovations. When the renovations are complete, you are free to do what you would like with the home.

Many people choose to use a 203k loan for the the home they will be living in. A 203k loan can lead to a very reasonable mortgage when purchase price was low and the renovations increased the home’s value. For this same reason, you may decide to sell the home because the increased value means more profit. In other words, you may want to flip the home.

Getting Away from a 203k

You won’t need to use a 203k loan every time you want to flip a home. As you accumulate money from the sale of homes, you may someday be able to buy a home and renovate it with cash. This means that when you sell the home, you pay yourself back for the money you invested plus more.

As you accumulate more money from the sales of homes, you can start buying bigger homes that need more or less renovations. This means that you’ll be able to sell them for more money, which means more profit. This is how some of the biggest real estate investors get to be so successful. They pay off their investment and take the profit to roll into another project that will result in a bigger profit.

It’s important to know that this takes time. You’ll have to find a home, go through the loan process, wait for the renovations to be completed and then sell the home. However, the payout can be great, and that will make waiting worth it.

If you’re looking for a way to invest in real estate (and you aren’t afraid of work), flipping a home might be for you. A great place to start? By talking to a knowledgeable mortgage lender.