Tuesday, July 31, 2007

Flip That House?

House flipping has been around for years, but the recent run-up in real estate prices has made it a hot topic. Television shows such as "Flip that House," "Property Ladder," and the upcoming "Flipping Out" are making many people think that anyone can go buy a shack, since $25,000 into it and make $50,000 or more.

Is that the case?

First, let me say that the idea of flipping a house appeals to me. I'm writing this post for me as much as anyone else! While I live in a super-slow real estate market, there are some decent markets not far from me (areas around Hoover, Alabama, for example). I don't think I'll be trying this anytime soon, because I want to do a ton of research before even considering it.

However, my wife and I enjoy watching some of the shows listed above, and those shows make it seem so easy. Is it?

The following video features an interview with "The Real Estate Baroness," Barbara Corcoran. I have seen her on "The Millionaire Inside" and visited her website and blog. While I don't agree with all she has to say (or, especially, with her attitude about some things), this interview is very good. If nothing else, it will cause you to think before you decide that house-flipping is no big deal.

Notice that Corcoran does not say that you shouldn't do it, but she emphasizes the "homework" side of flipping.

This trend will slow somewhat with the real estate slowdown, but if the market ever starts picking up again, there will be a new rush to turn every house over for major profit. We need to be good stewards of the money God has blessed us with. If we don't know what we are getting in to, we need to avoid such activities as house flipping. Yes, you can make money, but only if you know what you are doing.