Florida Real Estate Investors Earn Up To 82% Profit in 2013
The housing market in Florida has been on the rise during 2013 and there are no signs of it slowing down. Many people are getting into real estate investing for the first time, especially in Florida where house flipping has earned investors 10% to 82% profit during the first half of 2013, according to a new report from RealtyTrac.
Foreclosures Became Rundown
Throughout the economic and housing market slump over the last several years, people could not afford their mortgage payments let alone keep up with home repairs and maintenance. By the time homes went into foreclosure, many of them were in need of some T.L.C. Then the homes sat empty for a long time as home sales plummeted. Bank owned-homes became even more rundown and damaged.
Perfect Opportunity to Invest in Florida Real Estate Fixer Uppers
The economy, along with home sales has seen the biggest move forward this year, in 2013. People from all over are realizing that now is the perfect opportunity to invest in Florida real estate. Buy while homes are still cheap, fix them up and resell them for a profit. This process is known as house flipping. The fixing up process is called re-habing.
House Flipping Debate
Through research you will find that many people disapprove of house flipping but the reasons behind their opinions don’t make a whole lot of sense. Let’s face facts, a fixer upper can be an eye-sore on its own but several in one neighborhood quickly reduces property value for the whole community. Re-habing a home raises the property value and those needing to sell won’t have to take as big of a hit.
If you are thinking of investing in some Florida real estate by way of house flipping and you are new at the game, here are some common mistakes to avoid. After all, you want to make your profit as large as possible, right?
Mistake #1 Murphy’s Law
Foreclosures typically sell for 30% to 60% below market value in Florida. A foreclosure home in need of some work gives real estate investors a little bargaining power for negotiating an even better discount. Figure out your top dollar before negotiating any real estate deal. The biggest mistake new real estate investors make is under-estimating the cost of repair work. Get bids from several contractors before you put in a bid on the property. If there is one business where Murphy’s Law always applies, it is in home repair, so add 10% to the repair bill for a cushion.
Mistake #2 70% Rule
Once you have the estimated cost of repairs, you are ready to make an offer on the fixer upper. Never, ever buy a home for more than 70% of the home’s value after repairs. This has been the golden rule of seasoned real estate investors for many years and has almost always held true.
Mistake #3 DIY
Another big mistake that new real estate investors make when flipping houses is they plan on making most of the repairs themselves to save money. Wrong. Even if you are capable of doing most of the repairs yourself, you will lose money, not to mention your sanity. If you really want to do some of the work yourself, pitch in and give the contractor and his crew a hand. Hiring a contractor will get the work done quicker, they already have all the necessary tools and knowledge and it will give you more time to find the next great real estate deal.
Mistake #4 Agent or No Agent?
This next mistake is choosing to buy and sell real estate without hiring a qualified and knowledgeable real estate agent. Just don’t do it, it can cost you – big time. Trained real estate agents, like the agents at RealtyFox.com, know the history of the properties, the communities and the bankers. Agents know exactly where the best deals are and almost always have a good idea of the lowest price you could get the fixer upper for. RealtyFox agents are also very good at negotiations and can guarantee you get the best deal possible. They can save you a lot of time by steering you away from deals they know won’t go through. Best of all, our agents at RealtyFox.com ALWAYS put YOUR best deal ahead of their profit margin.
Use RealtyFox agents to find you the best fixer uppers in Palm Beach County Florida, and when the repairs are done, our agents will find you a buyer and make sure you get top dollar for your newly renovated property