Profiting From Flipping Properties

Flipping is a fast-growing investment option for those who have the ability to find a great mortgage loan for a property that requires repairs and updates, and quickly turn the property for a great profit. This is a very profitable business if done correctly, but there are some things that novice investors should be aware of before diving in head-first.

This practice is legal and ethical, but a few bad apples have caused some to believe it isn’t. Any flipper that inflates a home’s market value or falsifies documents is attempting to defraud potential buyers, and this is not okay to do.

However, truly flipping a property requires finding an undervalued property that can be sold for a profit even after repairing required items in the house. Most of these homes need at least some cosmetic and mechanical work, but some may simply be occupied by a seller that needs the property to sell quickly.

Professionals in the real estate and home finance industries should be your first line of contact to keep you informed about possible flippable properties. Or, you may choose to focus on a specific area and simply take a leisurely drive looking for properties in the area.

Another option for finding these properties is to review public records available at your county recorder’s office. These may show you any properties that are in trouble of mortgage loan default, or those which have been damaged in such events as a fire and have been abandoned.

Double-escrowing a flippable property will not even require your name to ever be placed on the title. This is achievable by finding a property where the buyer wants to live there while repairs take place. A period of longer than 90 days is attached to the escrow, and the idea is to sell it before this period ends.

Before even looking for or making an offer on a flippable property, mortgage loan financing should already be in place. Time is money in this business, and an investor needs to have the ability to move quickly.

Another option that never requires you to take ownership of the title is by entering an agreement to buy it, then finding a buyer or investor to purchase it prior to closing escrow. Profits ranging from $500 to $5000 can be made this way in a short amount of time, and it never requires you to finance a mortgage.

There are very basic skills which must be developed in order to be successful at flipping. First, you need to be able to spot a viable property to flip for profit. This includes knowing the local market well, as well as knowing what your budget will always be.

Another skill requires you to be active and able to negotiate with several different types of people. If you will not be repairing the properties yourself, you’ll need to develop good relationships with contractors, real estate agents, home loan lenders and other associated professionals to help you along your path to profitability.