Location and Specific Neighborhoods

When you are ready to buy and flip a home you must consider where you want to buy. The golden rule in real estate is location. You can always fix and change the home itself, or even knock it down to build a new one, but you can’t single handedly change the neighborhood it’s in. Every city or town has it’s desirable areas and the areas that are not so desirable. But if you play your cards right you can buy in a bad area and after waiting a short period of time you can sell in what may now be a good area.

There are two types of real estate locations: good desirable areas and areas that nobody wants to buy in due to high crime or other environmental factors such as close proximity to noisy facilities, polluting factories or an airport or highway.  Some good desirable neighborhoods have been that way for many years and that’s a pretty good indication that they won’t change in the near future barring some extreme circumstances. Buying in such an area offers a level of security to a conservative purchaser because there will always be a demand for real estate in that neighborhood but chances are it will be hard if not impossible to find a really cheap deal there.

This will make your plan to buy a cheap home and sell it at a high price next to impossible. You get the security of knowing there will always be a potential buyer in such a neighborhood but your margin after buying a flipping the home is likely to be small. The alternative is to take more of a risk and buy something cheaper in a less desirable neighborhood. You may have a more limited type of buyer to attract, perhaps someone who is only interested in purchasing a home in order to rent it out,

If you are watching trends in development and sense that a bad area is on the verge of being re-developed and gentrified then you may consider buying cheap and waiting until the neighborhood has had a face lift. At this point it could be very trendy and you’ll be able to make a lot of money on the flip.