When it comes to becoming a real estate mogul, most people tend to opt for the conventional option – purchasing and holding properties. And it’s the safest alternative, too.
So, what’s wrong with it?
While it’s usually safer than most, it’ll take you a lot of time to make a lot of cash with it. Also, you’ll have to go for a conventional loaning system if you need the monetary backup to purchase a property in Texas. And it can take quite a lot of time to get it approved.
Hence, the issue of ‘time’ will increase even more.
So? The solution?
If you want to make lots of money, you must consider fixing and flipping versus real estate. It’s an interesting idea. Let me explain a bit before moving on to the latter stages.
What Is Fixing And Flipping?
In a fixing and flipping procedure, you’ll start by buying a rather ragged property. It should be relatively inexpensive. Anyway, once you are done, you’ll have to invest a little more money and fix the house properly. And, then, you can try selling it at a higher price.
What’s the benefit of going through so much hassle, though?
To begin with, as you are purchasing a tattered house, you don’t have to invest a huge amount of money for that. Also, once you have fixed up the property, you’ll be able to sell it for 5x to 10x more than what you used to buy it. Sounds interesting, right?
Well, it’s just the beginning. Keep reading to know more about it.
Why Should You Consider Fixing and Flipping?
If you can orchestrate your fixing and flipping venture correctly, you can easily get a massive amount of money from it. And there are some additional benefits associated with it as well.
Keep reading to know more about it.
1: Selecting As Per Your Requirements.
Houses suitable for fixing and flipping in Texas can come in different shapes, sizes, and conditions. So if you scout a little in the market, you’ll surely find whatever you are looking for.
For example, if you want to sell the property as soon as you can, you’ll need to find a house that’s less ragged. This way, all you may have to do is a little bit of paint job, and that’ll be all. However, the initial investment will be a bit higher in this aspect. So, if you want to reduce the cost here, you have to find a more ‘broken’ option. It’ll require a lot of fixing, though. So, be ready for that.
2: Profit Potential.
As mentioned before, the profit potential of fixing and flipping is much higher than that of a traditional real estate investment option. For instance, if you are lucky enough, you can buy a house by paying only a small amount of money.
And after you have fixed, you can flip or sell the same property and gain anywhere between USD 40,000 to USD 70,000 of profit. That’s huge if you consider your primary investment.
Also, the whole fixing and flipping procedure usually takes around 90 days to complete. So, you can earn that much money without having to wait for anything especially if you opt for a hard money lender in Texas with a fast turnaround time.
3: Safer Investment.
When it comes to buying a run-down house, you’ll only have to invest a small amount of money at the beginning. And fixing doesn’t require too much of an investment as well.
Hence, even if you can’t sell the house at a higher price range, you can still make a decent bit of profit on your investment. So, it’s a much safer option than the conventional business.
Should You Fix And Flip?
I don’t find any reason not to, as long as you have a decent initial financial backup. However, there’s one thing you need to be wary about in this aspect – the taxes.
You’re going to make a quick turnaround of the properties in a fixing and flipping procedure. The swings in your income can increase your tax amount by a lot.
Thus, if you don’t stay updated with it, you might end up having to pay a lump sum of money at once. And that’s not really a good scenario if you ask me.
So, as long as you can promise to keep it in mind, you are good to go!