Spec Home Investors Versus Flippers: Which Should You Be?

There is money in real estate just waiting to be made, but should you pick the side of flippers or spec home investors? Read on to discover the pros and cons of each and choose the investment that’s right for you.

Looking to make an investment in real estate? Good move. Real estate is an excellent venture that can be a source of income for years. Just two forms of real estate investment are spec home investments and flipping. Spec home investment involves building a home with the intent to put it on the market, and flipping is purchasing and renovating a home to rent or sell. Both can be excellent enterprises, as there is good money in real estate. Each option allows you to customize homes based on current design trends making them likely to sell if they’re priced right, but each also has its advantages and disadvantages. Figure out which investment is right for you based on the pros and cons of spec home investing and flipping.

Spec Home Investments

Pros

· Spec home investors can make great money

· It’s a unique business, so competition is low compared to flipping

· Rather than changing an existing house, building new allows spec home investors to start totally fresh

· New homes may have more appeal to customers who want their exterior and interior design to match, which might not be an option with a flipped home

Cons

· Spec home investors must buy the lot they’re going to build on in addition to building the house, which can be pricy depending on the lot location and size

· You must work with many contractors to build your home to ensure a quality build, which could get complicated

· Before hiring a contractor, you need to review as many as you can to ensure you get the best deal on the best work

Flipping

Pros

· In some cases, flipping an existing home can be less expensive than building a new one

· Flippers are able to show off their creativity and take pride in seeing spaces in new ways

· Flipped homes offer the possibility of making money quickly

Cons

· Unforeseen repairs are almost guaranteed when working with real estate, which can add to your costs

· You must work with what you have, even if what you have is a house in shambles

· Holding costs can be costly and bothersome

So, which is better?

Neither spec home investors or flippers are necessarily better than the other. One group may make more money in a specific region, but it all depends on the local market, cost of living, and a ton of other factors. The one that is better for you is the one that works best for your lifestyle.

You don’t have to choose one or the other.

Both spec home investing and flipping can be lucrative moves in real estate and can be taken advantage of by anyone with the money. If you’re low on funds, you can apply for an investment loan from a private money lender like Level 4 Funding. Level 4 Funding specifically offers rental property/investment loans and Arizona Fix and Flip Loans, which can help you realize your real estate goals and get you on the road to profit.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO

NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
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