A couple of builders in my area have bought and remodeled old homes to resell. Seems risky, especially since you don't know what you're going to get into. But maybe it's less work than I thought.
I've done remodeling while living in a house, with an eye toward resale. I typically have lived in the house for at least two years while renovating (new kitchen, baths, flooring, etc.), rather than doing a straightforward flip. I've always profited from the resale; $12K on my first, $40K on my second, and expect $50-60K on my current. Part is due to general rising property values, and part due to my improvements.
If flipping a house is something you want to do, be sure you know what you're getting into. Many houses will benefit immensely from a new kitchen, baths, flooring, paint, and general repairs. However, make sure first that the house is structurally sound, that the mechanicals are good, etc. Key to a successful flip is timing . . . the longer you hold onto the house, the more it costs you. The changes should be primarily cosmetic. (Yes, moving interior walls IS cosmetic!)
Look at some of the estimators available on this site to get an idea of what you'll spend on remodeling/upgrading. Calculate a budget, and see if there is sufficient room for profit after your expenses. You'll need to look at comparable sales in the area both before you buy (you should be buying below market average, since you're looking for a fixer-upper) and the potential resale values. Pay attention to per-square-foot prices, as well.
There's a new show on TLC called Property Ladder. They follow first-time flippers as they buy, renovate, and sell properties. Watching it, I've seen them make all the same errors I did on my first house, and then some!
Hello Randall... Your question is the answer. You appear to lack the qualifications necessary to estimate the value of the original purchase, construction cost estimating, project management, general contractor experience... how are your design skills and market (demographics) knowledge. There is always a risk. Spec from scratch, buy remodel(renovate). No matter what you do, your money is out there, and continues outbound until settlement! Probably not a good idea unless you have deep pockets, industry knowledge, experience, design and build capabilities. It's very easy to 'over improve' a remodel and price yourself out of the local area mortgage market, so you're left with a vacant property. Business Rule #1; "Never fall in love with a house". Give it a think before jumping into the deep-end. builder257
Hey Randall - I too recommend Property Ladder on TLC ... It's really frightening how budget and time schedules can get out of control when you're trying a quick 'flip'. It's highly profitable, but only to the extent that you have additional funds, above what you've budgeted, and additional time, for all those unexpected problems. If you're not willing to put your $$ down on a table in Vegas, you won't be happy as a flipper either!!
