For the last few years, flipping properties has emerged as one of the excellent ways to build wealth in real estate. Almost every prudent investor wants to flip properties in order to make substantial profit in a short span of time. However, not everybody knows what it really means to flip properties. Moreover, many investors have this conception that it is not legal to flip properties. This is not completely true. There are many legal ways to flip properties, and those carry tremendous potentiality for profit as well. Let me have the honor to explain some of those prudent ways to flip properties.
What does it mean to flip properties?
When you flip properties, it means you buy a property, but you do not hold it long for rental purpose. Rather, you buy this property with a motive to sell it quickly, keeping a substantial margin for yourself. Flipping properties is a hot product in the real estate market, and it is very easy to find a potential buyer. However, you must be well versed in bargaining in order to make a great deal. Your real estate negotiation skills are on test while you flip properties for profit.
Do You Need to Fix Up The Property before flipping?
Well, there are numerous ways to flip properties, and there is no obligation to fix up the property before selling. However, no doubt, if you sell the property after fixing it up, it is certainly going to earn you more profit. First fixing and then flipping the property is the most common and the most reliable way to build some real good bucks in real estate. As per this method, you have to buy a property in a poor condition at a much cheaper rate. Then, you perform some repairing work in order to improve the condition of the property and make it saleable. The prospective buyers for this kind of properties are those who are looking for a property to live in. On the other hand, if you do not want to perform the repair work, you can still flip properties easily. However, your prospective buyers this time will be non-other than other real estate investors who are looking for such properties to fix and flip the same. It is obvious that you will not be able to build as much profit as you can build with “fix and flip” method. Still, the best part is that whatever profit you make that makes a good amount in comparison to the little time you spent in performing the deal. This means, if you flip properties without fixing it up, you can build rapid significant profit. On the other hand, if you flip properties after fixing it up, you spend more time, but at the same time, you make much more profit as well.
Wholesale and Retail Market
Being a prudent real estate investor, it is very important for you to understand the retail and wholesale real estate market. The retail real estate market is the one, where the buyers are those people who are looking for a property for their personal use. On the other hand, the wholesale market is the one, where buyers are non-other than real estate investors who are looking for suitable properties for flipping. It means, if you are planning to flip properties for profit after doing the fixing work, you will have to search your buyers in the retail market. Likewise, if you are looking to flip properties without doing the fixing work, you will have to search your buyers in the wholesale market.
Is it Prudent to Invest in Under Construction Properties?
Well, the answer depends on how smart you are. You must be able enough to analyze the mood of the market. Actually in this process, you sign the purchase contract when the property is under construction, and when it is developed you flip properties to somebody else in either wholesale or retail market. This carries tremendous risks because it is very hard to foresee how the real estate market will behave after a year or so. If you have done your research well, you can flip properties for profit. However, if things go wrong, you may not find a buyer to flip properties. This can cause a huge loss for you. Therefore, be very careful while you jump in this process to flip properties for profit.
Overall, if you possess good real estate negotiation skills and can do the calculations properly, you can easily flip properties for profit.
