My credentials? I have done both . There is a wide range of money you can make. Just like any other goals in your life, set a goal.
Let’s first describe what “flipping
” a house is. There is really one word (flipping) that is used interchangeably for two kinds of flipping
This can also be called “selling a contract”.
Here it is how it is done. You find a house. There are many, many ways to find houses
. FSBO houses, ask people, knock on doors, find old empty houses and a myriad of other ways. These will generally be “distressed” sales. In other words, the seller must be in a position to have to sell the house and is willing to discount the sale.
Next you must determine what the house is going to be worth to your buyer. Most times these houses will be in some sort of disarray. That means that the normal buyer won’t be able to buy the property because it won’t be financeable. Your buyer is probably going to be an investor.
Your will use the same formula as if you were going to “flip” (see Flipping #2).
Your next step will be to make the seller your offer and negotiate to a place that has to be in your favor. Your profit is made now.
It would be in your best interest to have already done some homework on where to find Flipping #2 buyers. At this point you will take your contract to one or more of your buyers and “sell your contract” t.o the new buyer The property is never in your name. What you make on the “Flip” is the difference between how much you have “bought” the contract for and then how much you “sell” it for.
Need money fast? This is a good way to do it. Search for houses endlessly. They are out there. If you work at it, you can find one in a week. The most I ever make “selling a contract” was $12, 000. that might not seem like much but it was pretty easy money
This type of Flip is really a rehab. The process is that you buy the house, do the repairs and then resell it.
You will need much more homework to be done on this type of flip.
The formula is something like this::
- How much will the house sell for all fixed up nice and pretty
- How much will it cost to repair the house to sell
- How much it will it cost for carrying costs–payments on borrowed money, insurance
- How much “oops” to you want to add to the account for things that went wrong or are not seen
- How much will it cost to sell the house
- How much profit to you make to make
- How much will your closing costs be both when buying and selling
- How much can you buy the house for in order to following your formula
Once you have completed that formula the answer will be how much can you pay for the house.
If you do or are doing some of the work yourself you may be able to cut down on some labor repairs. If you are a good shopper you may be able to find discounted materials. There are ways to save money if you work at it.
This type of flipping is not for the faint of heart. Especially the first one or two. But once you get the hang of it and have a steady stream of houses that make a good profit you will be on your way to be called a “Flipper”.My husband and I flipped (rehabbed) a few houses. The very first one I did all by myself I made $100,000 in pure profit. That is the exception, not the rule.
Questions? Call me. I will help you find houses and I will be your Realtor to sell it in the fast way possible. Time is money!
Keller Williams Realty
3955 S. Soncy
Amarillo, TX 79119