First and foremost, one can never tell for certain how much rehab will cost until they start...as hidden defects can be found that can be far more costly to repair than anticipated.

IMO, flipping is for those with know how and/or who have a pot of money to spare. In order to have the best chance of not winding up underwater on a flip, one REALLY needs to know what they are doing who has solid hands on knowledge of all the systems of the home..or have the money to hire someone who does..and they don't come cheap.

IMO..best bet is to first have the home inspected by a highly qualified home inspector. That means one who has a license in good standing in your state if it is one that licenses the profession; the HI should also carry errors & omissions insurance that is in effect. The HI should provide a detailed narrative report with digital photos of any defects foundÂ..not a generic same day check listÂÂor a bunch of boiler plate. Be prepared to pay more than the cheapie going rate for an inspection that is truly meaningful. Last but not leastÂ...check references. Have the home inspected for termites and signs of termite damage either by the HI if he is licensed to do so as well (termite inspection is beyond the scope of a home inspection, and in many states requires proper training and licensing, or a qualified termite insepector.

Also hire a firm that inspects underground oil tanks if the home has one in order to make certain it is not leaking...as such leaks have been known to cost in the thousandsÂÂsometimes millions, depending on just how much land needs to be cleaned due to the leak spreading. Be prepared to have to pay to have the tank decommissioned if need be.

If it has a septic system, hire a qualified septic firm to make certain all is in order...which requires excavation etc. DonÂt let anyone sell you on a dye test onlyÂ..as that simply tells you the system is working at the momentÂÂwhich means it could be ready to crash at any time. In some areas, like here in NJ, a new septic system can run about 25 to 35KÂ..without complicationsÂsuch as problems finding another area that "percs" in order to establish a new leach field.

At least one would then have a decent idea of any visible defects that may exist, that could also indicate the existence of more defects that may be hidden.

Flipping is NOT for the faint of heart, or for those on a tight budget or for those who are not experienced general contractors who donÂt have the money to hire oneÂ.
Expect to spend a good deal of money, time and sweat equityÂ.and be well prepared to deal with all of the permits that most likely will be required for much of the needed work. Visit your city/town's code official to determine code in your area...as once you start renovating, code issues that are grandfathered in as pre-existing usually have to be changed to meet current code. So..you may wind you having to change things that you thought could remain as is...which can be VERY costly.

I strongly suggest that you research this VERY carefully on the web and in the library, and not move forward until you are VERY well educated on all of the pros and cons involved. That is the only way to "flip" responsibly, without losing your shirt....and even then in this market, there are no guarantees....especially if credit remains tight making it very hard for even many well qualified buyers to obtain a mortgage.

Last but not least, talk to people who have renovated their own homes...and hear the tales of problems, unforseen complications, mistakes, delays etc. that have cost them to go way over their planned budget. That could give you a decent idea of what to expect. Prepare for the worst...and hope for the best.

Also consider that if you will need financing to make the initial purchase you will be paying a higher interest rate. Mortgage loans for owner-occupied residences are lower than those to investors. The down payment required is also likely to be higher.

/tricia

And just because a house is "worth" $XXX,000, that doesn't mean that (especially in this market) you can actually sell it for that price.

Or that you can sell it at all, at any price...

There is a house by my old house (we sold 2 months ago) that went to sheriffs sale back in November. Apparently someone bought it then relisted it. Last I looked a few weeks ago, this house is still for sale, so it's been almost 9 months. No clue why the house isn't selling. It's a 3 bedroom 1 bath rancher for under $125k, which is cheap compared to others selling for that price.

The market is too risky. There is no way I would buy a house to flip right now unless I could hold onto it for a year.

I read somewhere--don't remember where--that the only place to make money on a flip is the purchase price. In other words, unless you get the house for a screaming bargain, you won't make a profit no matter what renovations you do. Remember, there's taxes to pay on the purchase and sale, RE agent commissions, lender fees. So just to break even you'd have to buy at say $100k and resell for $115. And if the top house in the neighborhood sells for $125, then you're not going to sell your flip for $180.

Maybe this person your DH worked for lucked out, but then again, she hasn't sold it yet. I'd look into it very carefully before investing any money.

Not to pile on, but the insurance will also be higher for a non occupied home.

Very good advice Logic. Freezetag, did the lady who bought that house buy it to flip or to live in?