Real estate is an income-producing asset. Simply put, this means that it’s something you own that, by virtue of you owning it, makes money for you. Flipping real estate is basically a process where you keep buying more expensive houses and selling them quickly for more than you paid for them — the operative “flipping” — to generate fast profits. Those profits are immediately put into another house and the process is repeated. Here are the basics of how to go about it.
Flipping Homes – The Steps
1. Get Situated
If you’re like most Americans, you’re probably a renter. You’re going to need to make the transition from renting to owning to flip real estate. The easiest way to do this is to get hold of a realtor and tell them that you want to buy, how much you have to put down and how much you pay in rent. You’ll need to have an income to do this because it’s going to require another step that is imperative when you want to buy real estate.
2. Fix Your Credit
If you have great credit already, you’re halfway there. If your credit is not so good, you can still make it work. “Repair your credit” places might help. You need to pay off any collection accounts you have and then reestablish your credit by making payments on a revolving account. You probably don’t need anyone to help you with this.
Just get an easy credit card, such as from a discount store, and make regular payments on it. Your credit will improve over time. There are bad credit cards out there, too, and these can help. The main thing is that you have to be current on all your bills.
3. Find a Good Home and Buy it
Remember, this isn’t your dream home; it’s an investment. Don’t be picky about it. Have your realtor help you to find a great deal on a home and don’t worry too much beyond that it’s structurally sound and if it’s up to code. You don’t want something that’s going to require a lot of fixing. A realtor can help you with getting the financing by directing you to good sources. You may also be able to find a homeowner that will let you carry their mortgage.
4. List It!
This is the flipping part. Your real estate should go up for sale almost immediately. Don’t worry about major improvements, just get the real estate on the market right away and jack up the price by 10 to 15 percent. If you can get away with 25 percent, that’s even better.
5. Find Another Home to Flip
Take your profits from the first home you sell — remember that 15 percent on a $100,000 home would be $15,000 — and put it into a more expensive piece of real estate. You’re going to repeat the same process over and over again, increasing your profits as you go.
6. Move up the Ladder
As you do this, you’ll continually generate more income and you can buy more expensive real estate. Doing this repeatedly is how many real estate big wigs got started and how they made their fortunes.