Why Flipping a House in Today's Market is Not a Good Idea

If you watch TV late at night, there is a certain hour when paid infomercials begin to appear.One such infomercial was about how you can flip a house that is in foreclosure and make a fortune.There is an old saying, "If it sounds too good to be true, it usually is."The best thing you can do when you come upon such an insidious ad is shut the TV and read a book.

Flipping a house in today's market is not such a great idea.First of all, there are a myriad of problems you can encounter with the home that you are not prepared for.Secondly, the housing market is so bad that you may not even be able to sell the house - let alone for a profit.
As the guest continues to espouse the benefits of house flipping, the final clue at the end of the program tells the entire story.He is selling a book on how to become wealthy flipping houses in a short period of time.Thus, his fortune is made selling the book and not through teaching how to flip a house in foreclosure.

It was recently reported that home foreclosures have risen by 48% so far this year.Whenever something this big happens in a particular market, you start to hear all the hype about how easy it is to take advantage of the current situation to make a ton of money.Well, it may be easy for some, but generally not for those just now getting in on the action. Furthermore, flipping involves buying and then selling a house in a short period of time.48% is a frightening statistic and means that there is an excess of inventory on the market.Excess inventory means lower prices and/or longer sales times.

While there are people who make a living flipping houses, they have been at it for a long time.Sometimes they make a profit; other times they don't.For the average person, however, any consideration given to this method of making a profit should be cast away until such time as (1) the economy becomes stronger; (2) the individual learns as much as possible and researches this type of buying and selling practice; (3) the individual has the funds to buy and repair a home and (4) understands all of the risks involved.

Flipping a house is more than just buying and selling it.It requires inspection of the home, fixing needed repairs and costs you didn't anticipate.You also need to think about the length of time it will take to prepare the house for selling, closing fees and taxes, insurance fees and titles.Hopefully, if everything goes as planned you may realize a profit.But, what if there are problems along the way?Can you afford to lay out additional money that will ultimately eat into your profits?

If you are thinking about flipping a house that is in foreclosure, you may want to tune in to a program televised on a cable channel.It is about this gentleman who flips houses for a living.If a case is to be made why this is not a great idea, watch the show.The stress alone will give you pause to rethink this entire endeavor.

Thanks for taking the time to read this article, I hope you found it useful. If you would like more information on personal financial topics, please visit market street for more helpful information all personal financial topics.

Jeff Gilbert is a 16 year veteran of the banking, investment, and insurance industries.

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