Flipping Houses In Brooklyn? Hire A Real Estate Attorney

Flipping houses describes purchasing a revenue-generating real estate and quickly reselling, or “flipping”, it for profit.  

One way to profit from flipping real estate is to buy a house in need of repairs, fixing it up, and then reselling it for a profit. This process is also known as “fix and flip”.

Profits from flipping real estate also come from purchasing at a low cost and selling for a (often much) higher price. This is frequently seen in a rapidly rising real estate markets.

One of the rising and booming markets is – Brooklyn, New York.

According to a national study real estate investors are enjoying some extraordinarily substantial profits.

Brooklyn ranked third in terms of how much money people made by flipping a home or apartment within one year of buying it; first two were San Francisco and Marin County, CA. 

Investors in Brooklyn real estate made an average of about $238,000 on their flips. The national average per flip was $62,122, according to RealtyTrac’s third-quarter national home-flipping report, showing that Brooklyn flips made almost four times the invested money!

“People who took the risk to buy and to flip in Brooklyn this year have been greatly rewarded,” said Pamela Liebman, CEO of The Corcoran Group.

Here are some examples of recent Brooklyn flips supplied by Realty Trac: a Brooklyn flipper made more than half a million dollars — in 168 days; another flip was a second-floor unit bought for $495,000 and sold 239 days later for $649,000; and, an amazing flip by a real estate financier who paid $1,200,500 for a 4-story brownstone and sold it for a $2.1 million, or a $1 million profit for the 3,600-square-foot building by making minor renovations in gentrifying Bed-Stuy, 81-days later! 

Another dramatic rise in Brooklyn has occurred in scheduled foreclosure auctions — from 14 in a year to 83.

When buying or selling a home, one faces multiple extremely important and complex legal issues. Commercial real estate is usually much more complex, however, the residential real estate is far from being a simple process – and even the smaller, subtle legal details need to be handled correctly. Otherwise, these transactions can turn into major problems, with issues that will certainly cost you. 

Thinking of flipping houses in Brooklyn, NY? Here are some things to consider first:  

Pros

• If done correctly, flipping houses can make you a lot of money. As we have seen in just some of the cases earlier, investors can earn two or three times what they originally put into the property.

• You can actually earn substantial amount of money in a very short time. Not all flips happen quickly, however, there certainly are real success stories that prove some happen incredibly fast.

• Gain experience and knowledge of real estate, finances, laws, home remodeling, etc., and make connections within the industry, including realtors, attorneys, contractors, building inspectors, insurance brokers, and other investors. These can come in handy for any future investments, as well as assist you in your current transaction.

 Cons

• These homes often need a lot of work, and for the best returns, kitchens, bathrooms and floors will need to be renovated.

• It can be a risky endeavor, as the cost of renovations, mortgage and time could potentially be larger than your eventual profit margin.

• These homes could have unanticipated problems that show up after the purchase, such as foundation cracks, termites or mold. A back up budget would be needed just in case repairs do not go as smoothly as planned.

• Flipping too quickly could result in a tax audit, meaning if the money made does not immediately roll into a similar investment, your profit may be subject to a capital gains tax.

 Once you are certain you want to embark on a house-flipping journey and have a proficient real estate agent to help you succeed, your next step should be to ensure your legal rights and interests are protected – by choosing a reputable and trustworthy Brooklyn real estate attorney to represent you.

Real estate transactions require many crucial documents, such as the deed, mortgage loan documents, bills of sale, legal descriptions, plat of survey, and title and title insurance policy – and they should all be reviewed for any legal irregularities by your real estate lawyer in Brooklyn, who will further advise of any necessary changes and add any of your contingencies.

Make sure you have a competent and experienced attorney on your side to negotiate on your behalf, but also to take steps to ensure that you are aware of any legal particulars in the state of New York regarding real estate transactions.

Having legal representation by your real estate lawyer in Brooklyn will mitigate your risks of falling into legal pitfalls, and increase your chances of securing a profitable deal for yourself.

The Levin Law Group’s expert Brooklyn real estate attorneys can assist individuals and business entities in a broad spectrum of residential and commercial real estate transactions throughout New York State.

We invite you to take steps to ensure your rights and interests are protected – get in touch with our real estate lawyer in Brooklyn today.