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Rehabbing and Flipping are often used interchangeably, but the two terms are not always one and the same; an investor can “flip” a home without undertaking any major renovations or repairs in the right market. On the other hand, an investor can “rehab” a property and not flip it, adding it instead to their portfolio as a rental unit.

Flipping

House flipping is a common real estate investment strategy that involves purchasing a property, holding it for a short time, then selling it for a profit. A house flipper will typically hold each property for a few months up to a year.  Investors usually buy distressed properties at a discount, rehab them, and sell them at a profit. To get profit, the flipper must pay less than the market value for the property and know the amount it will take to renovate the home. Typically, Investors shouldn’t pay any more than 70% of the properties after repair value (ARV) less the costs of repairs to acquire a property. Investors who specialize in flipping properties can realize sizable profits and their capital is at risk for a much shorter time compared to those who invest in buy-and-hold properties.

Rehabbing

Rehabbing is the process of restoring and improving a property. In most cases, rehabbing does not involve substantial alterations to the floor plan but may include major repairs to components such as roofing, electrical, and plumbing systems. Rehabbing generally goes beyond simple superficial repairs. Rehab properties can offer wide profit margins while simultaneously helping investors increase their portfolio and network. These projects can take anywhere from a few weeks to a few months, depending on the amount of work needed.

Most rehabbing projects involve a period of demolition followed by framing and foundation repairs, HVAC, plumbing, and electrical work, and ultimately trimming and painting.

Successfully rehabbing will leave you with a healthy profit making this a very lucrative business. Ready to get started? For un-compromised service and quality of work, give Carolina Renovations a call (704) 853-9608.