A traditional home “flip” consists of attempting to compete in a bidding war with other investors for a property that an investor can add value to and sell at a profit.
After a “successful” purchase, the home would then typically be renovated, upgrading it to premium quality. The better the quality of the finish, the more likely it is that a property will sell at top dollar.
Because of the time to buy and hold a property, costs to renovate it, costs to list it, sell it and ALL the substantial selling costs, investors who “flip” homes require the potential for large profits of 15% – 25% or more to offset the risk. Occasionally, we have lost money and often earned less than our projections. It’s a risky business… you see it on TV!
But investing to “Add Value” to real estate is as old as the U.S. Constitution.