Flip A Coin
Flip a coin. “He flipped out, man.” They called him Flipper, Flipper…!!!
“A Flip” in real estate is buying a dump, fixing it up, and thus unloading it in 3 months for a profit. BIG business kids. No fool’n.
To be a flipper you must have the following: money, patience and a strong stomach.
Money. Cash only, on-the-spot, deposited at the public auction. Everyone wants a cheap property, because a lot of people are cheap, so these properties will be very competitive.
Patience. If you don’t get the first one you bid on, never fear, as there is an endless supply of people who have quit paying their mortgage.
Strong stomach. You must have a degree of fortitude to roll with the waves at the auction, shell-out hard cold cash, and patiently wait to reel in the big one. Dramamine anyone?
However, what could give you an ulcer is the rehab. Auctioned homes are distressed and generally need more than paint and carpet. Behind the walls could be electrical, plumbing, and/or structural matters that require attention. Often tax liens and HOA obligations must also be resolved.
The good news is Buyers love rehabs! All they see is NEW! CLEAN! THE NEIGHBORHOOD! AND THEY DON’T HAVE TO REHAB IT THEMSELVES!! The last part is key because most people do not know their way around a hammer.
It is not unusual to make a 20% annual return on your investment. Not bad. Do that a couple of times and you may think the Tagament was worth it.
I tell you this to enlighten you on the risk. You must have a high tolerance for risk, and you must keep a cool head. If you are prone to worry this is not the kind of real estate investing meant for you. On the flip side (teehee…) I work with some flippers and they are a smart, jolly lot. Flipping can be very fun, very profitable, and free from the tyranny of a tenant.
Please feel free to contact me if you would like more information on the auction and/or flipping.