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To find the best off market properties for house flipping and to market your repaired properties, check out Mashvisor: https://bit.ly/2Vwrukf.
One of the most popular topics in real estate investing for beginners is flipping houses. Many beginner real estate investors choose this strategy due to the opportunity to make money quickly and due to the lack of the need for long-term commitment.
So, what is house flipping?
Also known as fix and flip, this is a real estate strategy which refers to buying a distressed property, fixing it up, and selling it for a much higher price.
To succeed and make money in real estate in this way, you need to:
– Buy a property below market value
– Perform very cost-efficient repairs which will increase the property’s value significantly
– Sell the property for a good price
The profit for the real estate investor is the difference between the sale price (also called the after repair value or ARV) and the purchase price as well as the repair costs.
How do you go about flipping houses in real estate investing for beginners?
1. Write down a business plan
Decide on your budget and method of financing based on your savings and other financing options. Your budget will determine the property type, the property size, and the real estate market that you can afford.
Decide on how to go about fixing the property. If you have the right skills, you can repair the property on your own. While this requires a lot of time and effort, it is probably be the most cost-efficient way to fix the property. The other option is to hire contractors in case you have zero skills and time. In this case, your budget will go up.
2. Figure out financing
In flipping houses, you need money to buy the property and to do the necessary fixes and repairs so that you can sell it to a home buyer or a real estate investor at a considerably higher price.
With this strategy for real estate investing for beginners, you don’t qualify for a conventional mortgage. However, there are special fix and flip loans and other short term loans that you can use. Keep in mind that these loans have very high interest rates because of the short lending period.
Meanwhile, if you have enough savings, house flipping is an excellent way to invest money to make money in real estate quickly.
3. Search for properties for sale
MLS listings are not good house flipping. Thus, real estate investors need to look for distressed properties from motivated sellers.
Focus your property search on off market properties. In real estate investing for beginners, don’t go for a property in a desperate condition. Choose a house in a decent condition in order to minimize the repair works and expenditures.
One place to find off market properties in any US real estate market is Mashvisor. Check out Mashvisor’s Property Marketplace for foreclosures and properties listed by other users: https://bit.ly/3ePkLcN. You can search based on housing market, budget, property type, and other criteria.
4. Buy the property
House flippers with previous experience in real estate investing or good negotiation skills can buy the property on their own. Alternatively, in real estate investing for beginners, you can hire a real estate agent. An agent will be able to negotiate an excellent price.
In any case, make sure that you pay below market value for the house to end up with a profit from house flipping.
5. Fix the property
Focus on fixes and repairs which don’t cost a lot of money but which will significantly increase the ARV of the property. If you are hiring contractors, look for reputable ones with reasonable rates.
6. Market the property
The last step in house flipping is marketing the fixed house. As a beginner real estate investor, use different resources for property listings such as an agent, websites, newspapers, or your own network.
You can go back to Mashvisor and list your fixed property on our platform to attract real estate investors looking for good deals: https://bit.ly/2YLKe1q.
And that’s how flipping houses is done. When deciding if that’s the best strategy for real estate investing for beginners, take into consideration that this is a very active way to make money in real estate which requires full devotion. On the positive side, house flipping is a great way to make lots of money over a very short period of time.
To look for affordable properties to flip and to market your fixed properties, check out Mashvisor: https://bit.ly/3ghRRSW.