Home flipping means that you purchase a home that is in a fairly bad condition, repairing and selling it for a profit. Sometimes the homes purchased will need various updates whereas others will be full on tear-down projects. However, home flipping has evolved so there are various way to approach such projects:
Retailing: This is the most common type of home flipping. Essentially it is what we have described above. The buyer will purchase a run-down home perhaps because it has a lot of land or is in an attractive location and the buyer will upgrade it, hoping to sell it for a higher profit. To ensure that your do end up coming out with a profit you should have access to the following information; current and up-coming real estate reports which contain information about the best streets, upcoming urban renewal projects, the demand for various renovations, the most effective renovation techniques and finally you should have contact information for certain professionals in case you have no experience with various tasks and in case you are running out of time.
Wholesaling: This type of flipping also involves you purchasing a home that is not in the best condition but the difference from retailing is the fact that you are not renovating it. Instead you are trying to find a suitable investor who will take up the home renovation job. In most cases by wholesaling you will get a smaller profit than you would if you retailed the home. However, wholesaling has its benefits; you do not need to spend time renovating the home which in turns saves you the hassle, expenditure and stress. To be successful at wholesaling you need to know who the real estate investors are in your area, the type of homes that flip the best, and you need to have the money to quickly execute this type of transaction.
Assigning the purchase: You even do less work here than you would if you were wholesaling the property; here all you are required to do is buy the property but you do not close on it yourself, you get a real estate investor to do it by charging them a small fee.