Flip Single Family Home For A Quick Profit

When you flip real estate you buy at a price below the going market value of the property, then sell quickly at a higher price than you paid, earning a profit on the sale.

There are two methods of flipping property:
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1. Do little or nothing to the property before you sell it.

2. Do moderate or major cosmetic or structural work to the property before selling it.

Method 2 will usually give you a higher profit, but it:

• Takes you more time to do the work.
• Costs you more in fix-up fees and materials.
• Can be riskier to you because a higher profit isn't guaranteed.

You get best results by flipping single-family homes

• There are more single family home available to work with.
• You have more potential buyers for single family home.
• Single family home offer greater price flexibility than any other type of property.

So look to single family home as your flipping "training wheels." Start with REO foreclosed homes and build from there. For single family flipping, here are your estimated time inputs:

Estimated time for your project and looking for suitable single family home to flip: 

8 hours; Purchase of single family home: 6 hours; Property checkup, preparation for sale: 7 hours; 
Qualifying prospective buyer: 4 hours; Sale closing: 5 hours; Total estimated time: 30 hours. Profit potential: $50 to $500 per hour, based on a profit of $1,000 to $15,000 per sale.

Special Notice on Flipping

The U.S. Department of Housing and Urban Development (HUD) adopted a rule intended to curb misleading practices in flipping that sometimes occur. Homes that are sold within 90 days or less of their date of purchase will not be eligible for mortgage insurance issued by the Federal Housing Administration. The FHA is said to insure about one million mortgages per year¡ªsome 15 percent of the total number of mortgages issued annually. Sublet Properties for Non-Ownership Profits

You can rent an apartment, office space, warehouse facilities, etc., and sublet them to a tenant for a higher fee than you're paying.

• You rent a 3-bedroom apartment in a desirable area for $I ,000 per month.
• You furnish it with basic items¡ªcouch, armchairs, beds, tables, and so on, which you buy at auction or remainder sales for $750.
• You sublet the semi-furnished apartment for $1,600 per month, with two months' security deposit, or $3,200.

The whole key to your sublet success is:

You must have a sublet clause in your lease allowing you to sublet the apartment. Don't try this method without a sublet clause! It works because, by putting in a few pieces of furniture, you change the whole offer¡ª you're renting a furnished apartment¡ªnot an unfurnished apartment!

Estimated time for your project: 

Find suitable apartment with sublet clause: 6 hours; Sign lease: 1 hour; Buy and install furniture: 4 hours; Find suitable tenant: 8 hours. Total estimated time: 19 hours.

 

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