Buying a home is an already-risky investment, but what if this becomes part of your career, or at least a side job? Called “flipping,” this process of buying homes, rehabilitating them, and then selling them for a profit put many investors in hot water when the real estate market crashed in 2007. But, according to a recent Chicago Tribune piece, practices have changed since then, and buying houses – now often foreclosures – may not be as much of a risk. In fact, real estate professionals are even holding seminars about flipping houses.

What’s different now? As the Tribune reports, buyers six years ago would pre-purchase homes in some cases – the properties weren’t even built yet – and then sell them for a profit. Once the market collapsed, however, these buyers were left with properties that they neither could afford nor sell.

Flipping, in the present, is not as much of a risk, and investors appear to be more careful in their approach. Presently, foreclosures are the properties of choice, and after making some minor improvements to the property, the investor puts it up on the market and tries to sell it in a couple of months. Although, as the Tribune article explains, the profits are not as large, flippers sell more properties per year than before and pay with cash or have backing from investors.

Flipping with foreclosures is still a risk, however. As many properties are sold at auctions, the buyer does not have the opportunity to see the home beforehand. The buyer, in this case, could end up with a home only needing a paint job – or he could end up needing to repair foundation or cleaning out mold.

If you plan to start flipping properties, purchasing foreclosures is not something to be done on a whim. Instead, have a plan for selling the property as quickly as possible and understand that the home will seldom be in pristine condition.

Tags: flipping foreclosed houses, flipping foreclosures, flipping houses