subject: Some Methods To Flip A Property [print this page] Flip is a simple word which means buying a property and reselling it quickly, as opposed to holding on to a property long term as a leasing. Flipping comes in a number of varieties, most of which are legal and profitable, some of which are not legal. But such methods are also exists in some places.
Lets we start with some of the methods regarding how to flip a property
Fix and Flip
Fix and Flip process involves buying a land or home that needs work, fixing it up, then selling on the retail market, i.e., to a person who will live that particular circumstances. This method is very effective and true, and works very well. You can easily earn more money on one deal. The profit is depending on your market and how good you are at finding bargains.
The risk in fix and flips is either paying too much of the money or underestimating repairs cost. Be very clear in your fix-up costs and time period to may take to resell that property. In addition, make sure you include in your analysis the cost of paying a real estate agent to sell the property.
Refinance and Lease/Option
Another method is refinance & lease/option. Rather than put up for sale the fixed up property for all cash, sell for term basis. Once you have completed the rehab, refinance the property at its new appraised value. If you did the math properly, you should have little or no money in the deal or may be a chance to lose some money.
Sell the property on a lease with choice to buy. The rent fee from your tenant should cover your advance payment. When your renter exercises his option to purchase, you gather a larger profit, since you dont have to pay an agents broker fee. If the tenant movements his option after 12 months, you benefit from a lower capital gains tax rate.
Flip property As It Is
Dont always like to do fix-up work in property. You Better consider selling the property as it is as a light fixer upper. If the neighboring real estate market is hot, you should be able to vend the property in bad condition just a little below market. This is particularly in the case with houses in transitioning neighborhoods. You should be very careful and make sure, that you acquire the property satisfactorily cheap sufficient that you can sell it below market quickly and still some profit.
