Micro Flipping Explained

Specialist · Philadelphia, PA · Member since 2010 · 301 posts · 118 votes

Got to love technology! To think of all of those grungy, smelly vacant properties that I walked through over the years and all of the headaches of dealing with contractors that try your patience during rehabs can now be avoided in the form of flipping called "Micro Flipping". Not sure what it is, or if you should consider it? Hopefully this post allows me to drop this link that explains it: https://www.quickenloans.com/l...

There seems to always be the next best way to make money in real estate!

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Flipper/Rehabber · New York, NY · Member since 2019 · 340 posts · 122 votes
4y
Sounds exactly like wholesaling lol. Not to mention Zillow completely recently left the buying home business.
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David M.
Morris County, NJ · Member since 2020 · 5k+ posts · 2k+ votes
4y
@Rob Beeman
Looks like just another gimmick. Again trying to use "technology" to make money. As mentioned, Zillow is the latest to try that and they have shutdown their operations. Their statement basically said to me that it doesn't work. Trying to use their databases and number crunching AI's doesn't work. It can't account for the real truths and variability that the "market" has to offer.
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Don KonipolBusiness Member
Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
4y
@David M.
It's not that using AI and big data for "ibuying" doesn't work, it's that the ibuyers needed to get too big to justify the amount of capital they raised. As a result they "adjusted" their parameters, fudged on repairs and renovations calculator, and ran into a market with high demand and low supply resulting in quick sales time that effectively negated one of the main seller attractions, quick sale time vs longer time on MLS.
The real economics of the ibuying group is that sellers should be willing to sell for the same price they should net with an MLS sale. So if they can sell for say $300,000 on MLS in 120 days, they SHOULD be willing to sell for $300,000 less $18,000 broker commission less $5,000 interest, taxes, insurance (pro rata), less a $3,000 premium for a "sure" sale, or $274,000 assuming no repairs needed. The ibuyers than assumed they could spend say $3000 on cosmetics to make the subject a "premium" property, and sell for $307-$310,000. Worst case scenario they pay 3% buyer broker commission and net $297,000.
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Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
4y
It is still wholesaling no matter what you call it.
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