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All You Need to Know About Wholesale Flipping

If you are new to the real estate market and want to earn profits without locking in too much money as down payments or if you do not have the patience to buy a property, renovate it yourself and then search for a buyer, then wholesale flipping could be right up your alley. 

Wholesale flipping is a process, in which you can locate a property, put it under a contract and immediately sell that property to another investor. You will not have to pump in any money, other than binder deposits. You also need not worry about mortgages or credit rating, since all these will have to be arranged by the buyer of the property. Since you will only be flipping the property, you may not need to hire any contractors to rehab the property. You will only be flipping the property on and as-is-where-is basis. If you try to pick up pre-foreclosure properties, then they might be physically in bad shape due to the inability of the seller to maintain it in proper condition. The problem with such properties could be that they might look so bad that no buyer would be interested to buy it. Thus, you will also need the services of an efficient contractor to correctly calculate the cost of repairs on the home. Your investors should mainly be rehabbers willing to take on that task, so that you do not invest your time, money and efforts in rehabbing.

You will need to identify the right property that can be purchased at below-market prices, in order to successfully flip properties. Since your buyers will be investors too, they would also want to add on their profit margin before selling it to a would-be homeowner. Thus, you will need to sufficiently motivate the seller to part with his/her home at your rates. You should enter those neighborhoods, where the demand for properties is high and the chances of price fluctuations are low. In this way, you will have many prospective buyers, who might be interested to buy the property. The key is that all the three factors namely seller, property and buyer should fall into place with perfect timing, if you need to pull of a successful flip. In order to do that, you need to spread your tentacles far and wide. Keep in contact with an army of real estate brokers, agents, builders, investors, lenders and banks, in order to get a steady supply of properties to buy and flip. Your profit margin will depend on your purchase price, the location of the property, the mortgage position of that property and the offer that the investor makes on it. You may not get the same percentage of profits on every deal, but as long as you maintain a healthy average, then you should not be too worried about individual deals.

Your real estate attorney should be able to draw-up watertight contracts, so that you are protected in case the seller or buyer tries to back out of the deal. Once you gain enough experience in this line of work, then you might easily be able to identify a good deal as soon as you see one. You will also need ready investors to pick up the property immediately. If you are unable to close the deal in time, then you will lose your deposit.

Wholesale flipping of properties is a great way to earn money, especially in these current sub-prime market conditions. You should however, start small and understand the finer points of wholesaling before flipping larger properties.

Written by: SP
Date Written: 07/04/08 
Reviewer Assigned by: David
Reviewed by: GD
Quality Control: AG
Copyscape Results: Nothing copied
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Quality Control Completed on: 07/07/2008

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Flipped 4Runner
buy and flip

Image by John Jeddore
A friend of mine flipped his 4Runner after losing his brakes on a dirt road leading to the main road (where he ended up). He told me the brakes gave-way and next thing he knows, he’s upside down in the middle of the road.
It’s so weird, the 4Runner landed smack dab in the middle of the road.

He just bought the vehicle that same day.
He had it for an hour and fifteen minutes.

Flip Flops with Bottle Opener
buy and flip

Image by John Bollwitt
I almost bought these, but having a small piece of metal on the bottom of my flip flops just won’t work for me. Cool, but dangerous.

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