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All About Flipping Properties

flipping propertiesJust like in the stock market where investors and traders buy and sell stocks for profit, real estate flippers acquire properties in the hopes of quickly selling them at a much higher price after doing minimal upgrades and repairs. The flipper’s main objective is to buy the property at the lowest possible price, normally below the property’s current market value, and quickly dispose by looking for motivated buyers.

There are three types of real estate flippers, the classification of which depends on the amount of involvement of the flipper. Generally flippers can be categorized into a scout, a dealer, and a retailer.

The Scout

Usually, before you become a full-fledged flipper, you would have to go through the “scouting” stage first. The scout is an information gatherer – someone who collects vital information about a certain property and provides it to potential investors for a fee. The fee varies depending on the value of the property.

The Dealer

Just like the scout, the dealer also streamlines the real estate market to extract information about properties. As a dealer you’ll usually sign an “option to purchase” contract with the seller which gives you additional control of the property. The dealer may then opt to sell the contract to other potential investors for a much higher price than what the scout makes.

The Retailer

The retailer basically embodies the true essence of a flipper. If you’re a retailer, you normally buy information from scouts or purchase contracts from dealers. From there, you can do minor changes to the property then sell for a quick profit. Among the three, it is in here where you can pocket the highest amount however, it may take months before you realize these profits.

One key technique that can significantly increase the turnover rate of your properties is to find motivated buyers and sellers. And who exactly are these motivated buyers and sellers? People and families who have just relocated from another city and are looking for a place to settle as quickly as possible are considered as motivated buyers. Newly-married couples who are eager to start building their own families also fall under the motivated buyer category.

On the other end of the spectrum, those who are in the brink of foreclosures would not want to put all their previous amortizations to waste so they immediately put their properties for sale in the hopes of recovering at least a portion of the capital they used to acquire the property. This is one example of a motivated seller. Those who are migrating to other cities or countries for good would also qualify as motivated sellers since they would want to quickly dispose their properties before they move.

Finding these people and connecting them together is a good strategy that can put money in your pocket as quickly as possible. Just always remember to continuously expand your network and step out of your comfort zone to increase your chances of meeting these motivated buyers and sellers.

For more tips and information on real estate investing, visit http://smartrealestateinvestment.blogspot.com/




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