Flipping houses is a rapidly growing strategy being used to cash in on the real estate market.
I’m guessing you have heard the term “Flipping Houses” by now. Over the past few years there have been many TV shows dedicated to this topic as well as many magazine articles, blog posts, books and courses.
The term “Flipping Houses” is used to describe buying real estate then quickly re-selling it for a profit.
Most people are only aware of one method used to flip houses, which is buying, fixing up and re-selling. There are actually a handful of ways in which you can flip a house.
In this post I will cover four different methods you can use to flip a house.
Flip Method #1- Buy, Fix and Resell
This method is the most commonly used method for flipping houses. This is the method shown in all of the TV shows.
The breakdown of this flip method is first to find and purchase a home that needs work, which you can snatch up at a discounted price.
The next step is to complete all of the necessary repairs and updating, that the home needs, to bring it back to life in a way that will appeal to a wide range of buyers.
The last step is to resell the home on the market and cash in on your flip project.
While this can sound like a very easy process there are a lot of risks involved and moving parts.
A critical part to this house flipping method is to buy at a price in which there is enough room for the unforeseen expenses that always come up. Give yourself extra padding on your repair estimate as well as for miscellaneous expenses that can come up. This is very important when you are first starting out.
Flip Method #2- Buy & Resell As Is
With this house flipping method you are completely eliminating the fix up process. The goal is to find and purchase a great deal that you can turn around and resell “As Is” and make a profit.
This method may be well suited for those that do not want to get involved with the fix up process. They would much rather sell to someone that is ready and willing to take on the project of rehabbing the home.
You may be able to have quicker paydays by not taking on the fix up portion but there are many variables involved such as market condition, your asking price, the overall condition of the property, etc.
Flip Method #3- Wholesale
Wholesaling is a very quick method to flip a house. In the simplest form, wholesaling is getting a property under contract (getting your offer accepted) at a discounted price and passing the great deal on to someone else for more money.
This method is a great way to generate quicker paydays by selling directly to the investors that want to fix up and resell homes.
The key to wholesaling is to obtain a low enough price for you to make the profit you need and to leave enough profit for your end buyers to make the return that they need as well.
Flip Method #4- Buy, Refinance and Lease
The last method to flip a house is to purchase it, fix it, then refinance it and lease (or lease option) it out.
The key to this flip method is to buy a property at a price in which you can ultimately lease out for an amount that covers the mortgage payment and all operating expenses. This way you will have a monthly cash flow coming in.
Flipping houses can be a very lucrative business. Now that you are aware of four different ways you can flip a home it is time to decide which one is the best method for you.
I hope that this post was very helpful to you. If it was, please share with someone who you think may benefit from it.
Here’s to your success!!!
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