5 Tips to Successful Real Estate Flipping
In order to successfully flip real estate contracts whether you’re involved with potential rehab projects or pre-foreclosures you need to have a solid investor network to present your ‘package’ to.
It is imperative long before you lock up any property that you can, within a few phone calls, contact active and willing investors who will consider your offer.
The key to successful real estate contract flipping is making it easy for your upstream investor group to quickly resell properties you’ve assigned to them. Consistently providing well priced deals that your investor group can turn over quickly gives you the credibility you need to flip contracts on an ongoing basis.
Many rehab investors have more money than time so by you doing the legwork you are providing them a valuable service.
Here are FIVE tips that’ll help you gain credibility with potential investors looking for properties:
1.) Accurate repair estimates - Investors don’t like surprises. When evaluating a property be able to estimate the repairs by a margin of about 20%. If you underestimate your repair cost, your investor will have to re-evaluate whether or not the property is really a good deal or not.
2.) Accurately estimate the Market value of the property - Don’t base your property value estimate on the asking price of other houses that similar in spec. You need to base your value on similar houses that have been sold in the area in the last 30-60 or 90 days.
3.) Understand the impact of holding costs - Know the average ‘Days On Market’ (DOM) for properties selling in that area. This will have a critical impact on your investors holding costs and ultimately your profit. If the average DOM is 90 this means the investor can expect to pay out 3 months of loan payments, most likely borrowed from a hard money lender at somewhere between 12-14%.
Of course if you know the average DOM is 15-30 days your deals will be all the more attractive to outside investors.
Again due diligence in the form of market research on your part will insure you are credible and are communicating the most accurate information regarding DOM to your investor group.
4.) Research the property - be prepared to examine and communicate to your investor group issues regarding deed problems, structural records, comps, zoning status, insurability report, and other key details that would affect closing and or re-sell. Again no surprises.
5.) Be serious and know your role - in other words, treat this as a real business. You are providing a service, a specialized niche that requires a combination of negotiating skills and knowledge of the real estate market. If your assignments turn over or ‘flip’ quickly and at the right price you will be getting weekly calls from investors providing you endless business.
Summary
The good news is flipping real estate contracts can be learned; there are some really good methods in the form of e-books available which are not very expensive. Successfull real estate contract flipping involves a mix of knowledge and experience, and probably the best way to get your foot in the door making money in real estate. Why not start the learning process? Most realize there’s nothing to lose and opens the door to acquiring wealth.
Leslie Collins has executed hundreds of preforeclosure deals in the last 5 years - which actually helped distressed homeowners as well as generating thousands of dollars in profits. Interested in learning about assigning realestate contracts for profit? - Visit: Find and Assign - beginners guide to real estate profits.
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