[ WHOLESALING] How would you flip a rental?

[Account Closed]

If you flip a rental do you use the same formula? 70% - REPAIRS? What if the property doesnt need any repairs? Do I have to get the deal for 30% discount in order to flip it?

[Michael Lewis Lee]

Hello again Fili! one of the best ways to do that is an Owner Financing deal which allows more ability to earn income.  You get an Option deposit fee, hopefully some spread on their rent for 2 or 3 years and the sale price that you both have agreed on up front.  To maybe help with any holding costs in case that house is empty for a while is what that fee is for on the purchase option.  The people that would take you up on that offer are people that have been denied for a bank loan and are more motivated and are a member of that biggest group right now.  Most of the time they will maintain it better when they think they might own someday.  You also have a maintenance agreement that only involves you over a certain price.  

You typically have to pay with a 20% discount under the FMV or ARV less any repairs needed. You usually figure the value on the income projected, not comps. A majority of Lease Option people do not make the purchase so you can just do that again. It will also give you the price closer to what you want.

Good luck again!