Hazards and Benefits of Flipping Foreclosures Properties For a Living
Hazards and Benefits of Flipping Foreclosure Properties For a Living!
I can't tell you the number of times I've repeated this to people who ask for my opinion, but YES, there is money to be made in Flipping Foreclosure if you treat it seriously and as a business.
What I mean is that you need to put time and effort into finding the motivated sellers, decent location, motivated buyers, good financing, motivated real estate agents etc. etc.
What is foreclosure property flipping?
It is selling the rights to an escrow for a property you've tied up. You don't actually own it, but you are assigning the rights to someone else and letting them close the deal*
(*Note: Make sure you check the legalities and rules in your particular state and always make full dislosure in the contract as to your intentions)
Here's how the process goes down.
Let's assume you're just doing a flip and not taking possession of the property.
First thing you need to do is find a property. A good one that's below market, in a decent location and perhaps one that's in a good school district.
You then negotiate a fair deal with the seller, tie down the foreclosure sale in escrow or title and immediately advertise the house for sale via the best sources outlined in my earlier blog postings.
Once you find a suitable buyer, you negotiate a settlement and exit out of contract and assign the rights to the new buyer.
Here are some Hazards and Benefits of Foreclosure Flipping.
Hazards: Don't fall in love with the house unless you intend to live in it. Remember, foreclosure flipping is a business and the last thing you want to do is buy and hold these. I've been to mansions where I forgot the profit potential and wanted to live in the house soooooo bad! Don't do this. You're there to analyze and tie down the house for flipping.
Hazard: Don't hate the house. Who cares what the house looks like and what area it's located in. Look at the comps, the population density, active vs. sold real estate market in the area, the foreclosure rates, financing on the house etc. Let the market guide you and not the appearance of the house.
Hazard: Always have an exit clause. Don't ever tie down a house unless you know you have a way to exit out of it. In most states, financing is a pre-printed exit clause on every standard purchase contract. You don't ever want to get into a foreclosure transaction and not be able to get out of it (especially if you find information that's not favorable to this deal)
Hazard: You Snooze You Lose. Trust me on this. The opposite of be careful and be pateint applies here as well. I've lost more deals because of my slow progression on some hot foreclosure lists and to this day, I am angry by the profits I've left in the table because I just didn't move fast enough. Put in a good exit clause on your contracts and move at the speed of light on the hot foreclosure deals.
Benefit: It is extremely profitable. You can make as little as $3,000 on a small deal to as high as $200,000 or more on the bigger deals without EVER owning the foreclosure piece.
Benefit: It is zero risk. Because you are not actually buying and holding the property, you have no risk and no out of pocket. You find it, you sell it and you profit.
Benefit: It is very fast. You can research, locate, tie up and flip a foreclosure house in less than 48 hours. I've done in as little as 6 hours and made $10,000 in the process. This is not the norm but after some experience and the right knowledge you can duplicate this.
Benefit: You can make FULL time money on part time work! And it doesn't get any better than that.
Happy investing :)
filed under: foreclosure investing
I can't tell you the number of times I've repeated this to people who ask for my opinion, but YES, there is money to be made in Flipping Foreclosure if you treat it seriously and as a business.
What I mean is that you need to put time and effort into finding the motivated sellers, decent location, motivated buyers, good financing, motivated real estate agents etc. etc.
What is foreclosure property flipping?
It is selling the rights to an escrow for a property you've tied up. You don't actually own it, but you are assigning the rights to someone else and letting them close the deal*
(*Note: Make sure you check the legalities and rules in your particular state and always make full dislosure in the contract as to your intentions)
Here's how the process goes down.
Let's assume you're just doing a flip and not taking possession of the property.
First thing you need to do is find a property. A good one that's below market, in a decent location and perhaps one that's in a good school district.
You then negotiate a fair deal with the seller, tie down the foreclosure sale in escrow or title and immediately advertise the house for sale via the best sources outlined in my earlier blog postings.
Once you find a suitable buyer, you negotiate a settlement and exit out of contract and assign the rights to the new buyer.
Here are some Hazards and Benefits of Foreclosure Flipping.
Hazards: Don't fall in love with the house unless you intend to live in it. Remember, foreclosure flipping is a business and the last thing you want to do is buy and hold these. I've been to mansions where I forgot the profit potential and wanted to live in the house soooooo bad! Don't do this. You're there to analyze and tie down the house for flipping.
Hazard: Don't hate the house. Who cares what the house looks like and what area it's located in. Look at the comps, the population density, active vs. sold real estate market in the area, the foreclosure rates, financing on the house etc. Let the market guide you and not the appearance of the house.
Hazard: Always have an exit clause. Don't ever tie down a house unless you know you have a way to exit out of it. In most states, financing is a pre-printed exit clause on every standard purchase contract. You don't ever want to get into a foreclosure transaction and not be able to get out of it (especially if you find information that's not favorable to this deal)
Hazard: You Snooze You Lose. Trust me on this. The opposite of be careful and be pateint applies here as well. I've lost more deals because of my slow progression on some hot foreclosure lists and to this day, I am angry by the profits I've left in the table because I just didn't move fast enough. Put in a good exit clause on your contracts and move at the speed of light on the hot foreclosure deals.
Benefit: It is extremely profitable. You can make as little as $3,000 on a small deal to as high as $200,000 or more on the bigger deals without EVER owning the foreclosure piece.
Benefit: It is zero risk. Because you are not actually buying and holding the property, you have no risk and no out of pocket. You find it, you sell it and you profit.
Benefit: It is very fast. You can research, locate, tie up and flip a foreclosure house in less than 48 hours. I've done in as little as 6 hours and made $10,000 in the process. This is not the norm but after some experience and the right knowledge you can duplicate this.
Benefit: You can make FULL time money on part time work! And it doesn't get any better than that.
Happy investing :)
filed under: foreclosure investing
posted by Mr. Foreclosure at 4:23 PM
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