Flipping Real Estate
By Heather SeitzFlipping Property: What's it About & How can I Do It?
Your Quick Guide to Making Money Flipping Real Estate in 7 Simple Steps...
Every time you turn your head, someone else is talking about flipping property. What are they really talking about and is it something that YOU can do and
make money doing?
First, let's define the two types of "flipping real estate".
- Assignment Of Contract
- This is ofter referred to as Flipping The Contract. You find a property for "pennies on the dollar", put it under contract and then "flip" that contract to, most likely, someone that is going to do the rehab, or renovation on the property. Another term used to refer to this type of property transaction is wholesale real estate investing.
- Flipping Real Estate
- Buy a property, fix it up, and resell it to an "end buyer". This is known as "flipping real estate", "rehabbing", or "retailing" to name a few.
OK, now that we've gotten the terminology out of the way, I want to first start by telling you that real estate is simple, but not easy, so if you're looking for a get rich quick scheme, you're probably going to get yourself into trouble.
Now... on to how YOU can make money flipping real estate.
This article focuses on the second definition of flipping real estate: buying, fixing and reselling.
- Step #1 - Find the Right Deal
- If I made a dollar every time someone told me there were no more deals, I'd be a multi-zillionaire by now! Here's the thing and I want you to get it through your head! There are PLENTY of deals - even where you live! Make a consistent effort to really look for houses that are overgrown, in need of paint, possibly boarded up, etc.
- These are going to be your best bet for flipping real estate.
- Step #2 - Estimate the Repairs
- You can either go ahead and bring a contractor or handyman with you or you can get a simple calculator that will figure out the "rough" numbers - like the one found at www.fixingandflipping.com or you can read more about the costs involved when making real estate flip at Calculating Profits when Flipping Real Estate
- Understand, however, that more often than not - like 99.99% of the time - your budget will come in lower than your actual costs! You may also want to have a home inspection to check out the major items: foundation, roof, plumbing, electric, HVAC, etc.
For an example of what can go wrong when you are hoping to turn a quick profit see the risks involved in flipping real estate.
- Step #3 - Negotiate the Contract
- This is where many people run away from real estate. "Contract" is not a four letter word! In fact, it is your best ally when you are negotiating!
- Use your contract negotiations to pay for the repairs by getting seller contributions and repair credits. This will keep you from having to dip into your own pockets for repairs!
- Make sure that you have a way out in case the deal isn't going to work for you. Some "escape" clauses that you can handwrite in are: - "Subject to satisfactory appraisal" -"Subject to partner's approval" - "Subject to satisfactory inspection"
- Step #4 - Find Your Money
- Don't get caught up on this one! Finding money is really much more simple than you might imagine if you've followed steps #1 - #3! I know it sounds cliché, but it's true: Find the right deal and the money will come.
- You can use private lenders or hard money lenders if your credit's a little shaky, or in some cases, you may even be able to use a regular mortgage company to get the deal done! Just make sure it all makes sense financially!
- Step #5 - Get Your Contractors in Place
- You should have your workers ready to go before you even close the property. Think about this: what if your monthly payment on the property is $1500/month? That's $50 each and every day out of your pocket while the property is just sitting there...
- Be ready to start the moment you close!
- Step #6 - Manage the Renovation
- Unfortunately, you MUST stay on top of your workers! Use a solid contractor agreement that protects you and follow up on them daily. Stop by every couple days minimum and push, push, push until the job is done!
- Step #7 - Market and Sell the Property
- Put a For Sale By Owner sign in the front yard immediately to start building a buyers' list.
- Once the job is complete, call all the interested parties back and invite them to an open house and accept offers! Make sure you've kept all of your receipts so you can prove any repairs to the buyer's mortgage person and/or the appraiser.
You can read more about house flipping, see the article
7 Simple Tips For Flipping Houses.
Sure, it's possible to go ahead and turn property over VERY quickly.
My record from closing table to closing table (the time I bought the property till the time I sold the property) was 53 days for a quick $10,000.
But, make NO mistake, those types of deals are few and far between, so be forewarned - Flipping real estate takes work... But the rewards can be HUGE!
Recommended Resources:
Finding Deals: www.motivatedsellermarketing.com
Estimating Repairs: www.fixingandflipping.com
Finding Contractors: www.servicemagic.com
About the author: Heather Seitz
Heather is the co-creator of Fixing and Flipping software, takes the guesswork out of estimating repairs. Learn how to estimate repairs and calculate profits in seconds.
Go to: www.fixingandflipping.com for your free video and mini-course.
Related Pages
Freedom Steps With Property Investing
Flipping Real Estate | Make Money Flipping Property | Flipping the Contract | 7 Tips for Flipping Real Estate | Calculating Costs & Profits when Flipping Real Estate | The Risks Involved in Flipping Real Estate |
The Aftermath Of The Real Estate Bubble | Wholesale Real Estate Investing | The End Of The Real Estate Bubble - Is It As Bad As They Say?
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