A Checklist for Flipping Houses

Location

• Someone once said it's all about "location, location, location," and in the world of house-flipping, this is especially true. Choose an area that people want to live in. It should have low crime, good schools nearby, and be convenient to major highways and commercial areas. The investor should buy property in an up-and-coming neighborhood. Buying in an economically depressed area is unlikely to yield the profit you want, while purchasing homes in affluent areas leaves little room to raise the sale price.

Investment

• Determine how much work a house will need before being ready to sell. Unlike a homeowner, you lack the luxury of living in the house for 30 years and making repairs as needed. At most, the house can only be empty for a few months -- or better, a few weeks -- before you put it to market. If it remains unsold longer than that, you may lose money. Don't purchase a house to flip if you can't get it "sell-ready" in a reasonable amount of time.

Curb Appeal

• Do not underestimate the importance of "curb appeal," or the house's attractiveness from the outside. For better or worse, curb appeal can make or break a buyer's decision. Even if the rest of the house is impeccable, poor or mediocre curb appeal can cost a sale. If you're trying to profit from flipping, invest in a fresh coat of paint, a little landscaping and any needed debris removal. Because house-flipping is your business, many of these expenses are tax-deductible.

Support Staff

• The moment you purchase your first flip house is not the time to be looking for plumbers, roofers and electricians. Meet with these professionals in advance and secure an ongoing relationship you can use to further your real-estate goals.