Interested in house flipping… using HELOC .

[Anna Davis]

Okay so I have always been interested in housing/real estate and I work a 9-5 focused on housing. I recently took out a Heloc on my primary home to do a repair and consolidate some debt. Now that that’s done I am looking into use the rest of the funds at a foreclosure auction to acquire my first investment property. Since I am just beginning I am just looking to make a quick sale to build capital. My thoughts are that if it’s in good enough shape I can sell to a consumer buying with a mortgage company or if needs work sell to an investor for a discount to make a profit. My point is I want to avoid paying for the repairs, am I on the right track and is there any advice I should know before my first auction ? Thanks in advance.

[Stuart Udis]

Auctions are quite possibly the worst place to buy if you want to avoid repairs. How do you know what you're buying without the ability to see the inside let alone conduct inspections? Setting that aside, I don't believe its realistic to buy a home and turn around and flip it without making any improvements. The combined transactional costs alone between the purchase and sale are going to be north of 10% of the transaction value. Remember you are using debt to make this investment, not reserves  sitting in your bank account so I recommend a more conservative investment approach.