There are various strategies that an investor can explore when choosing to go into real estate; one of these strategies is house flipping. House flipping is a type of real estate investment strategy in which an investor purchases a property and then quickly resells it for profit. For first-time house flippers, it always seems like the hardest period. However, once you begin this investment strategy, you would begin to learn the rudiments and start making money.
There is a need to gather enough knowledge about this as one bad decision can make you lose everything. To know how to find houses to flip, an investor will need to follow four crucial steps. Below is an overview of each of the four steps needed to find properties to flip at a profit.
1. Network in Your Community: Network extensively and talk to potential buyers before you even start looking for houses to flip. The best place to start is in your community, never underestimate what you stand to gain by networking in your community. However, this doesn’t guarantee you would find a business but it would provide you with a few leads regardless. Word of mouth advertising is still very relevant today.
Joining a group of real estate investors and realtors is a great way to start as they would have access to valuable information about the market.
2. Talk to Wholesalers: The business of wholesalers is finding rehab properties, placing them under contact, and finding a buyer who would execute the house flip. The buyer would then assume the place of the wholesaler in the contract, paying a fee to the wholesaler for being the middleman. However, this method is not the most cost-effective method of making a property purchase for a house flip, it can be very time efficient and may save money in the long run.
3. Short Sales: This is where a homeowner defaults on his mortgage payment and sells his property for less than the amount owed on their mortgage. If a homeowner is in the position where they need to proceed with a short sale, it is most likely because they need to sell it quickly, and therefore are willing to sell for a reasonable discount. In this regard, if you are working with a real estate agent, you can ask to be shown short sale listings.
4. Find a Mentor: One thing about real estate is you can not have all the knowledge, you would need to seek the advice of someone who has long been in the business. If you know a successful house flipper, ask if they’d be willing to mentor you. This way you learn the rudiments from someone who has seen it all in the business.
The business of house flipping can be risky, however, if smart decisions are made, you can acquire enough wealth flipping houses. Don’t forget, you can also lose everything if you make a bad investment. Before you get into the world of house flipping, do your research to make sure it’s right for you.