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Assuming the RE market and economy is a stable position, what would stop someone from buying property, building a house (doing some work themselves to save money (ie. installing carpet, doing landscaping, etc.), selling it, taking that profit and doing it again?

I would think all you need is capital…..any pitfalls to that approach?

5 Thoughts on What’s to stop someone from building a house, selling it, and doing it again…over and over?
  1. Reply
    August 6, 2011 at 6:34 am

    Its called house flipping and there are actually a bunch of tv shows on about it at night. The only thing you need is the money. The only pitfall is if you buy a house and try to fix it up and find its in worse shape than you thought and it will cost more money than planned. With the unsure economy I would not suggest trying this endeavor right now.

  2. Reply
    August 6, 2011 at 7:20 am

    If any of the houses turns out to be unsellable for whatever reason (it burns down; the person who sold it did not really own it and the real owner did not sell it; the land is contaminated with toxic waste; a noisy new bar opens next door; mortgages suddenly become unavailable; etc.), the cycle ends and the person has lost all the money.

  3. Reply
    August 6, 2011 at 8:10 am

    Nothing. That’s how the new housing market works. Some are built by large corporations that build huge cookie-cutter tracts. Others are built by custom home builders. And some are one-offs just as you propose. As long as you have the capital to continue on and stay in business, it’s one way to make money.

  4. Reply
    August 6, 2011 at 9:00 am

    There are many people who do just that. Nothing wrong with it, save for this current market. Real estate values are so weak that you may find yourself selling at your cost, even with doing some of the labor yourself.

  5. Reply
    August 6, 2011 at 9:52 am

    Companys that do that on a larger scale, are called developers…………..

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