Real Estate Recovery
Flipping Houses: By Ken Davis
The art of wholesale real estate/ flipping houses is basically acquiring properties for someone else and making a profit for the work you’ve done. This requires no up-front, out-of-pocket money or credit and you definitely don’t need a degree or much experience. You will need a will to win that comes with a competitive spirit and the desire to succeed. With the proper coaching and knowledge of the business, you can go far in this business.
In real estate, wholesaling is the fastest way to make quick income investing in real estate properties with no cash or credit. In reality, all we are doing is merely bringing motivated buyers and sellers of properties together and being the connection between the two parties. Consider yourself as a matchmaker- who places people together that need to buy and sell homes. The housing recovery is just gaining steam and coming off of the 06′ lows so these are exciting times.
To start, what you do is locate properties of motivated sellers, place these properties under contract between you and the seller, find a buyer, and assign your rights to your contract with your seller and end buyer. After, you will collect your assignment fee that will be discussed between you and the seller. You can wholesale any type of property of your choice, but my area focuses on single- family homes.
-The Good Stuff-
How do you go about placing a property under contract? First, when negotiating a purchase price with the seller, you will sign a real estate Contract of Sale, showing the seller as the seller, and yourself as the Buyer. Now you have what is called a Ratified Contract. By having a ratified contract, you now have an Equitable Interest in the property and are immediately able to start looking for an end buyer. For example, if you place the house under contract to purchase at $20,000, you start at an asking price for a few thousand higher, this will be where you make your money. The seller is guaranteed $20,000 that he/she will pay you an assignment fee of but, you can make extra money off of the property if sold at a higher price than the contract purchase price. If you sell the $20,000 house at $32,000 you have made a $12,000 profit by simply making a market for buyers and sellers.
Finding Motivated Sellers:
When searching for sellers the aim is to find motivated sellers- focus on finding the ones desperate to sell. This could mean people in Bankruptcy, Divorce, Delinquent Taxes, Pre- Forclosure, Problem Tenants/Renters, or just in unwanted property situations. You are more likely to find a better deal on property from a motivated seller- they might need to sell urgently for whatever reason, and seriously need your assistance. Remember, timing is your most valuable asset, don’t blow it!
A few ways to seek out motivated sellers is to look in places such as your local area’s Housing code violations lists, Deliquent tax lists, and Bankruptcy listings. You can even evaluate some neighborhoods on your own. keep an eye open for abandoned homes or homes that are poorly maintained. Many of these data sources can be found online too and you won’t even have to leave the house.
Finding a Buyer:
Your buyers will usually be home renovators, landlords looking to purchase new properties, couples seeking a place to call home, or in some cases, maybe someone just looking for a house to fix up as a project. You might even sell to another investor like yourself who is aspiring to move up in real estate and is ready to take on owning and selling properties themselves. As you build connections through networking, you should develop a Buyers List, this is a list of known seekers who may buy and sell properties after they have been renovated. The more connections you make the easier it will be to flip that house!
Market! Market! Market!
Advertise yourself, make yourself known as a wholesaler, print flyers, post signs, the more static you create around your name the more business will come your way. Get you phone ringing fast and keep it ringing. Lets start flipping houses!