Tips on flipping a property

Tips on flipping a property

Tips on flipping a property

If you are one of those who buy a property with the intention to resell it quickly rather than holding it for a longtime period for rental, you are actually flipping a property. There are many ways one can flip a property. Most flipping are legal and profitable, whereas some are not.

The most common form of a flip is the fix n flip. This process works quite well. Fix n flip means buying a property that needs some fixes, and the buyer fixes it and put it up for sale in the retail market. Depending on the market and how good the buyer bargains, a single deal can earn as much as $15,000 50,000! However, one of the major dangers involved is underestimating the cost of repairs. One should be very careful while estimating the cost of repairs and determining the length of time of the resale. One should also not forget to add up the payments made to the real estate agent for the sale of the property.

A good strategy could be to sell the property for terms, rather than selling it for cash. Once the rehab is done, one could refinance the property at the new appraised value. The next step would be to sell the property on a lease with option to buy. The mortgage payment can be covered up from the rent paid by the tenant, and when the tenant uses the option to purchase, you make a good amount of profit, and in addition you do not need to pay the broker's fee. You could also have the advantage of a lower capital gains tax, should the tenant uses his option after 12 months.

Another way of flipping is buy and flip as it is. This process involves one to buy a property in a poor condition at a cheap price and sell it when the local real estate market is hot at a price just below the market rate. One must be careful to acquire the property at a reasonably cheap price so that he can still make a profit by selling at a price below the market.

The real estate prices appreciate as much as by 2% per month when the market is good. If someone can time it right, he can buy a preconstruction house or condominium and then sell it to a buyer once the development is complete at a high profit. One should be careful while using this option as if the local economy shrinks, he might end up making loss or be unable to sell the house or the condo.

Scouting could also be an option. The Scout is actually a property information collector and not a property flipper. The Scout collects information about a property that is put up for sale and sells the information to other investors for fees. The fee of the Scout varies and is generally dependent on the price of the property and the potential profit that the property can generate.

One other way of flipping is to put a junker property under contract and put your contract wholesale to another investor and receive a few thousands! Select the best one that suits you the best and go for it.

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