The 4 F's of Flipping Real Estate

The real estate flipping process can be simplified into 4 F?s. I will briefly cover each part here in the rest of this article.

The following are the 4 F's of flipping real estate

1. FIND - first and foremost you need to find your property. Many people put the cart before the horse in worrying about how to find money. First you need your rock solid deal and the money will follow. Your best type of home to flip is a residential single family 3 bedroom 2 bathroom home in the middle class area of your town. These properties are by far the best type to work with as there are plenty of them to go around and people want to live in these areas.

2. FUND -the money will follow based on your deal. Too many people worry about this the most and you really don?t need to. You can get money from many different sources that we will cover later. But without a deal you will not get any money. You will get money based on your deal. Many different lenders have a lot of the same criteria though. They will usually only lend on homes that you are buying at a big discount. The home has to be purchased at about 60% - 70% of its true fixed up value.

3. FIX - After you have found your deal and you have it funded then you begin the fix up phase. The important part of this is to bring in a more experienced contractor or someone who can do a better job than you so you can focus on finding your next deal. Always remember to negotiate the prices and do some research before saying yes to someone.

Get referrals and past work experience from any contractor. Also you should never be paying in advance for uncompleted work. Remember to never over do the fix up. Of course you need to make the home desirable for your buyers but there is a point when going to far with repairs. It will kill your profits in a second.

4. FLIP - The last part to the puzzle itself is the actual flipping part yourself. Your goal is to get the property sold as fast as possible to avoid long term holding costs. Some investors may use a Realtor and others don?t. I will give you my advice and opinion in subsequent posts. Both have their pro?s and con?s. But one thing all investors can agree on is to have a buyers database as you go so you can have the house nearly sold before it?s even ready.

As you go along in your real estate flipping business you are going to get many potential buyers looking at your deals. It is very wise to keep a list with everyone?s name and contact information, what they are looking for and what they can afford. This way when your next real estate property is done you know exactly who to call to get it sold.

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