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Posted over 11 years ago

How to Flip a House 101



As a reasonably successful wholesaler, I'm regularly quizzed  “Mike, how do you flip houses?” Before I advance straight into the “how to” of flipping houses, it’s imperative that you first know very well what exactly we are engaging in. Therefore…

Precisely what is wholesaling?

Wholesaling will involve placing a property under a contract after which selling it or assigning the agreement to a person who is able to actually buy and close on the property in your place. Normally, the reasoning is not to own the home you intend to sell.

What do I need to become a wholesaler?

All you need is ambition, positive outlook, knowledge, together with a little money. You won't need a four year degree, real estate license, or spiffy black suit. You actually don’t need money either. For anyone who is really determined and well-informed, it is possible to walk away from a sale with a profit without ever having put any cash down.

Just how can I flip houses?

It’s very easy - it’s like taking candy from the baby! I've layed out your “how to flip houses” guidebook in five easy steps.

1)    Identify property. This approach can be achieved via advertisements. By way of example, my company promotes “We can buy your home for cash as is.” you may market by way of car magnets, yard signs, pamphlets, letters, local Real Estate Investment Club sessions, and social networking websites. When you locate a house you are going to complete the sales contract using the owner of the listed as the seller and you also as the purchaser. In order for the written agreement to be considered binding, you must supply a deposit to the homeowner. You can offer them a modest amount of money (i.e., $10). A good agreement should provide you with about 45 days to accomplish simple steps 2 and 3.

2)    Establish your actual offer amount. To make this happen you ought to be mindful of the value of the house, how much money the home owner owes, what the homeowner wants (i.e., payment for relocating rates), the amount necessary to make repairs, plus the cost the investor (aka rehabber) would acquire the property for (i.e., 65% of market value).

3)    Spot investors and possible buyers. You can actually run an ad in the neighborhood newspaper or use some of your previously mentioned outlets to distinguish individuals or companies who would want to consider buying the home quickly. You may as well put signs around the home, get hold of landlords in the area, or networking with brokers, realtors, insurance agents, and so on. Moreover, show up at auctions - you can be certain to discover investors there. The theory will be to build a database of investors once you find your property - you will have a ton of people you could possibly market it to. Make sure to manage your investors well. You wish to maintain a good relationship with them that may get them to keep doing business together with you.

4)    Negotiate a great deal. Confidence is crucial. You understand exactly how much money you wish to make and you recognize how much the investor can stand to make from this deal. Use what you know and be firm.

5)    Close the deal. The title company does all the work here. Once you have found the house, sold it to your investor, drop by closing and let the title company maintain the rest.

Is it possible to produce an example?

You get a property which can sell for $150,000 following remodeling and this requires $15,000 in improvements. According to precisely what the owners owe ($70,000) and require ($5,000 to relocate), you'd put a contact on the home for $75,000. You then advertise the home to investors and negotiate a deal selling the house for $85,000. You bought it for $75, 000 so you made a $10,000 earnings.


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