Flipping Residential Properties

Making money quickly in the residential property arena is possible. It is a two fold process where purchasing the real estate and the sale of that investment will require five steps. If you have $20,000 in liquid capital, excellent credit, service resources you can trust and do your homework, you have a chance to make a profit.

You, personally, must have the money in your account and your credit score must be over 720, to insure a good interest rate. Forget the banks, use a credit union or a mortgage broker who works all loan products that exist. Credit unions cater to their membership, while mortgage brokers have more choices of loans from VA to Rehab packages. Next, learn how much money they will lend you, what type of homes, co-ops, fixer uppers, manufactureds you have buying power for and what special loans are available.

The backbone of all industries are our service people, make a list of any handymen, plumbers or licensed contractors, who will answer the phone when you call. Tell them you have a property needing work, find out what their turn around time is and their rate. Now you can budget for repairs and time on the resale market. Finally, look for that home or apartment that is going to turn a profit quickly, but stick close to where you live or know. Search like a real estate professional on the Multiple Listing Service through a real estate company’s or local real estate association website. The first rule is only buy three plus bedroom homes, since this is what 90% of buyers will require. Also, search 5% higher than what you were financially approved for, because you will offer 10% less than the asking price. Third, narrow your search to 5 homes because more is confusing and less does not give you a complete overview of the vicinity. Drive by these properties to see if you like them, take a hard look at the neighboring homes, question the neighbors and if vacant, walk around the home to assess outside level of repair required if any.

Now call a local, seasoned agent to see the interior of your choices. Find out what is selling, require them to bring comparables for each home and ask them to point out all red flags. A red flag can be a bad roof, cracked foundations, rotten fascia to foreclosures in the immediate area. Ask them what does the home need to resell for 20% more, granite counter tops for example, and how long would it take to sell it with those changes. Ask if they can give you a 1% break on commission, if you list the home with them.

Finally, please note depending on where you live you may need a lawyer in lieu of a title company and you definitely need to consult your tax accountant. Find out how you will handle this purchase and future ones on your taxes before you take another step; you can lose your profits on the back end. If you need a lawyer in your State, ask your Realtor how much your closing costs will run for your price range;it will take the agent 5 minutes to provide you a written itemized estimate.

Lastly, you bought the home, gave it a face lift and it is listed. Help your agent sell it! Have a small yard sale with the open house, put up her flyers where you work, tell everyone you know and send your agent the buyers. The agent will work harder for you and the profit is knocking on your door.