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5 Tips For Your Flips
One of the hottest trends in real estate over the last few years has been “flipping” houses. You see it everywhere, in books, articles and reality TV shows. Flipping is hot and why not? There are several ways to do it successfully and here is a list of the most common.
The first way we will discuss is the most common. That is the buy it, fix it then flip it method. Basically you buy a fixer upper and repair it then sell it for a profit. Many successful real estate investors have been doing this for years. They have tested out the system and proven it for you. The key is to purchase home as a bargain that requires as little fix-up as possible and you can typically generate $15k to $50 in profit.
Another method for flipping is the as is flip which works in hot markets. If you are not interested in fixing up properties flip it untouched. For this to work you typically need a home that does not need much in the way of repairs. In a hot market you can price the home for sale just below market and quickly turn a profit in a short period of time.
Then we have the buy it and refinance it with a lease option flip. Using this method for flipping you buy the home, fix it up and sell it for terms. That means you are selling the property in a lease with an option to buy later. The mortgage payment for the home will be covered by the rent payment you receive during the lease. If your tenant later exercises the purchase option you will get your profits without incurring the cost of a Realtor in most cases.
Yet another method of flipping is called the wholesale flip. You can use this method because the buy it, fix it and flip it scenario is so hot. When there are a lot of investors in the market seeking fixer uppers you can capitalize on this trend by finding the properties that show promise and re-selling them to investors ready to fix them up. Using this method does not generate the per unit profits that that fix it and flip it method does, but you can turn properties much faster for a smaller profit and not that much effort.
The last tactic to be covered is the pre-construction flip. This method should be used when the real estate market is very hot and appreciating at a rate of around 2% per month. By purchasing a home from a builder before construction is finished you can then complete the purchase when construction is complete and immediately resell the home for a profit. There is a potential down side on this method if the market should slip. Then you could end up with a home that is worth less than when you ordered it 6 months previously. Typically when home buyers are in the market for a newly constructed home they will pay a premium over the normal price if they can get a nicely upgraded home that is available to move in now.
If you are considering flipping homes for profit one or more of these methods should work nicely for you. You just need to evaluate the market you’re in and choose the method for flipping that will work best based on the market situation.
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