You are here:
Make Money Flipping
Make Money Flipping Real Estate
We closed on the sale of House #3 as of last Friday!
To make money flipping real estate, you have to put many variables together and make them work. Much like I used to do in my corporate job, a low risk real estate flipping opportunity can be created if you manage all these variables.
The actual rehab work is just part of the equation. Once the property is ready for sale you have to market, advertise, negotiate and get it under contract. Once you do this you now have to navigate through the home inspection, the seller qualifying for financing, the appraisal and title search.
If you get through all of this you got yourself a sale…and hopefully a profit too!
Since I am still learning about all of this, and being the “worry-about-everything” type that I am, this makes for a lot of stress and sleepless nights for me. But I am driven and have goals that I am committed to. So as stressful as it is, it is also satisfying to see the business that I am building and the goals I am achieving.
Anyway, back to the house…from the feedback we received, what potential buyers liked the most was:
- Move-in ready condition. On top of the full rehab I even included a new washer and dryer. I want the buyer to feel all they need to do is bring their stuff, no work required.
- Good, attractive and convenient area.
- Good schools.
- How well the property showed. This was in great part due to the staging. I am still on the fence on whether or not staging makes a significant difference. Although it makes the house show very well, and you could argue it helped get it under contract quickly, I really cannot quantify if it makes me more money or not. We’ll see…
- Price. I was offering a better house than my competition, at a lower price – because I bought looooow. Although this has not worked on House #2 (other factors there) it worked in this one and House #1.
Make Money Flipping Real Estate: Getting It Under Contract
At least for now I hire a real estate agent to sell my properties. She puts together very strong marketing package with emphasis on internet presence. This resulted in getting immediate traffic through this house the moment it was listed.
When marketing consider your target market and then, above everything else, price appropriately. Also make sure you include a LOT of good pictures of your property in whatever advertising format you choose.
As expected, because of the current pool of buyers in this market and the first time home buyer tax credit, our first offer came from…you guessed it - a first time home buyer. Their offer was lower than I would have expected and only had $500 earnest money. But (and this is a big but) the buyer was 90% through the loan process. Meaning that he had already been approved for the loan for another property but the contract fell through, because the property did not appraise. So this buyer was ready to close in two weeks, which is unheard off these days on a financed contract.
So I was faced with the decision of counter offering for more money but wanting to make this contract work since buyers like this are rare. I countered back with a higher purchase price and agreeing to all other terms and the buyer accepted.
I knew I was leaving some money on the table by accepting a lower purchase price than what I was confident I could get. But having the security that this was going to be closed in two weeks, in my opinion, was worth it.
Now all that was left was the home inspection and the appraisal.
The inspection must have gone great because much to my surprise I did not hear a peep from the buyer, inspector or buyers agent regarding any repairs needed. This is also testament to the good work done by the contractors I hired.
So, did I make money flipping real estate? That will be the next part…