Flipping Houses for (investment properties) Fun and Profit

October 3rd, 2009 admin Posted in realestate |

By Alan Brymer

I began flipping houses when I was 22 years old, which I believe should be proof to you that if I could do it, so can you. Allow me to share with you a few of the things I picked up along the way that helped me to have success as I went.

Tip #1: Always buy at least 20% under market value. In order to make money flipping houses, you can’t buy a property for what it’s worth and then wait around forever for values to go up. You make money when you buy, and not when you sell, as the saying goes.

The key is to buy houses far below what you could resell them for. My formula is to make an offer for 75% of the After-Repaired-Value (what the house will sell for in great conditionand they usually are not), minus any estimated repair costs.

Tip #2: The current market value is irrelevant. This might sound counterintuitive, but it doesn’t make any sense to focus on what a property is currently worth. All that matters is what you could sell it for. If you know that, then creating your offer is as simple as subtracting all buying, finance, repair, and selling costs (as well as your desired profit).

The resulting figure will let you know the most you can pay for a property. Besides, if the house you’ll be flipping needs repairs, it’s almost impossible to find comparables that are in the exact state of disrepair. Instead, find comparables of similar houses in great condition to know what you could sell yours for once you’re ready to flip it.

Tip #3: Always start your offer at leas than your maximum. If the most you could pay for a property, according to our formula, is $220,000 then I would make my first offer for $190,000. The reason is that sometimes you’ll be pleasantly surprised when it gets accepted.

Usually, though, the seller will reject it, but you might meet somewhere in the middle and still make more than you would have by starting out with your maximum offer.

Like I said, if a 22-year old kid can make money flipping houses, so can you. I recommend implementing these three tips I’ve shared above, and continue investing in your own real estate education as you go. Best wishes!

Click Here:StinkyMarketReport.net In this FREE digital book, learn the secrets that a $100,000,000 real estate investor has discovered about making money in a slow market, by understanding how market cycles REALLY work. Or, for info on Alan Brymer, go to www.AlanBrymer.com

Your Source For Real Estate Services