How To Flip Undervalued Properties In A Bearish Market

While the world economy is doing better this year than it has since the financial crisis of 2007-2008, some would stay we are still in a bearish market. A bear market may have some people concerned, but if you play your cards right, you can use a bear market to your advantage, finding undervalued properties and flipping them for a profit. One of the key components of flipping an undervalued property is first finding the right property to invest your time and money in. In order to do this, you must identify the areas close to where you live or want to do business that have undervalued properties and identify the ones with potential. This is not an easy task that just anyone can do, but with a little courage, a bit of know-how, and desire to succeed, it is possible.

Flipping houses isn’t an overnight road to riches plan like some TV shows and dream-come-true stories make it seem, but it is possible to turn a profit flipping homes. You must take the time to find the right property, crunch the numbers accordingly, and be realistic. You won’t be able to sell the house for as much as you could have five or eight years ago, but you can still turn a profit. Setting a realistic goal goes a long way in a bearish market. In keeping with a realistic thought process, look at where this undervalued property is located. Location, location, location, and once again just to stress the importance, location.

Some housing developments just don’t make sense, which is why the prices for these homes are so low. Think about where the property is before you jump right in. A bargain really may be too good to be true. In order for someone to want to buy your house that you’ve just spent the time and energy and money repairing and getting ready, it has to be close to certain amenities. Proximity to schools, hospitals, and shopping centers all increase the overall value of a home. You’re more likely to flip a house that is located nearby to a school than one that isn’t. People buy houses to invest in their future, which means children, ease of access to grocery stores, hospitals, and centers of commerce. If the price is right and the location is right, the property will sell.

Trust the experts. Use reliable sources, like CNN Money.com to find where the highest concentrations of undervalued houses are in your area. The best thing to do is find undervalued properties close to your home or in an area that you know well. This will make things easier on you as you well have a better knowledge of what’s around. You’ll feel more comfortable with how well you can market this house and who your primary audience is for buyers. If it turns out that you live in an area where the majority of the homes are overvalued, not undervalued, this may mean you need to expand your search, and work a little hard to flip houses. A longer commute to the job sight and less familiarity with the area are downsides to flipping a house outside of where you live, but it doesn’t mean it’s not possible.

And lastly, in order to turn a profit and flip an undervalued home in a bearish market, know what you’re buying. You have to see the potential in an undervalued house and ask yourself how much you can improve it in order to sell it for a higher price. Just because something has seen better days, doesn’t mean it can’t be a beautiful first home for a young couple, or a new family. But at the same time, you need to figure out if you’re buying something that really does have potential. If the house has a history of physical contamination, it might not be worth it, financially, to fix up the house. Many older houses have mold contamination, which can lead to extensive and costly repairs. Is the land nearby filled with lead or other pollutants which has made the area undesirable? These are things to consider when you are looking at properties. There a lot of factors that make houses desirable and there are many more that make them undesirable. If something seems too good to be true, it just may be. Knowing when to walk away from an undervalued house which has more problems than potential will save you money, and sanity, in the long run. Choose your properties wisely, and you’ll have nothing to worry about.

Don’t be daunted by the bearish market trends that still persist even as the global economy continues to rebuild. There is still a profit to be made by buying and flipping undervalued houses, it’s just a matter of taking the time to think through your real estate investment in Playa Grande, Costa Rica, put in the work and energy to making it succeed, and then finding the next project.

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By Ali Asjad

Ali Asjad is a content strategist based in Stockholm, Sweden. He helps companies in vast and varied verticals be more successful and visible online. Circle him on Google+ to further the conversation.