Flipping a property is to buy a house at a discount, setting up and then turn around and sell quickly for a profit. When you buy foreclosures and abandoned houses, it reduces the cost for you and increase the amount of profit you make as an investor. Before pursuing this investment strategy, it is important to understand how this process works. Otherwise, you may end up investing money in a property that has no real chance to make a profit.
1. Find a property to buy. Most of the time, abandoned property is very difficult to find, while seizures are easier to find. Looking for abandoned property is to search through a database of government property. To purchase a foreclosure, you attend an auction and bid on it, or work with a bank to buy a property directly. If you do not buy at an auction, make an offer on the property owned by a bank and wait for an answer from the bank.
2. Take ownership of the property and then start the set up. When correcting a property, to focus on the elements that seem unattractive to potential buyers. For example, set the appeal of the house by painting the exterior and improving the lawn. Consider upgrading the kitchen and the bathroom, because potential buyers typically look to these areas closely when buying a home. If you can not do the work yourself, hire a contractor to manage this process.
3. Enter the property for sale. For this part of the process, it is generally sense to hire a real estate agent. A real estate agent will market the property for you and give your home the most exposure possible. If a buyer is interested in the property, your agent to accept offers for you and then come to you to discuss offers. Once you accept an offer, the fence will be fixed.
4. attend the closing. The buyer must provide the funds for the purchase. You can use some of the funds to pay off the existing mortgage on the property and you can keep the rest as profit.
Tips & Warnings
When looking for properties, find homes priced well below market value. Some lenders accept low offers for properties so they can unload them.
Flipping properties is a risky business, even when you’re dealing with foreclosures. You need a large amount of cash to make mortgage payments and manage the repairs.