Flipping Foreclosed Homes For A Profit

Painting a wall

Many people are very interested in the prospect of flipping houses as a business. They see the cash-rich opportunity to make a very good living at this type of business, especially since the housing market is beginning to male a major comeback. Indeed, there are many properties available around the country right now that are just prime for flipping.

However, despite their research on the subject, most just do not know where to begin.

It has been my personal experience that wholesaling flip-worthy homes is the best way to get started in this business. Wholesaling homes entails placing a home under contract and then assigning that contract to another person. Average contracts are equal to about 70 percent of the fair market price of the house in full repair. This price would include your wholesale fee and cover any repairs that you have made.

There are at least seven great reasons that you should begin this type of career as a wholesaler:

  1. Low Start Up Costs. To put a house under contract and then assign that contract to a buyer can be done very cost effectively. In some cases, you can place as little as $25 down on a contract to secure the deal and then transfer the costs to the assignee. The person who you assign the contract to will be responsible for all closing and other costs of the house.
  2. No Ownership Required. When you are assigning contracts instead of purchasing homes, you are not burdened with any of the costs of ownership … even if they are just temporary costs.
  3. Fast Money. When you are not burdened with purchasing the house, you will make a profit in a manner of weeks instead of months. This allows you to flip more houses in a shorter period of time, generating a nice income stream.
  4. It’s Educational. You can use the experience to learn about how to flip houses first-hand. You will discover the real deals, what to look for in hidden costs in purchasing a home, and other important information that only the pros know. Wholesaling homes will be one of the most educational arts of your career and will help you become more successful in the future.
  5. Networking. While you are learning the trade as a wholesaler you will build a valuable network of business associates. Each of these people will provide you with insight into the industry and business connections that will be to your benefit. Building friendships with other investors will be beneficial to you and your business now and in the future.
  6. Art Of The Deal. To be successful at this type of business, you need to find the deals. Your deals have to be enticing so that investors are willing to jump at the chance to invest. They also have to be better than ones these investors can find themselves. Thankfully, this is not as impossible as it may seem. In fact, the more practice that you get, the better your deals will become. You just have to remember that these properties are distressed. This means that the person holding the title to the property has been sitting on it for a while and needs to sell it. With this in mind, you can be persuasive and create the ultimate deals.
  7. Work Part! As you are learning your new business you want to make sure that you still have income to fall back on. By beginning this opportunity on a part-time basis, you can learn the business, start generating income and still have your soon-to-be former employment helping you pay the bills.