Though ?flipping? real estate has become a popular practice, it is also pretty controversial. This is mainly because people have gotten into it without considering the ramifications of their actions and, consequently, engage in some very bad practices. The clumsy flipper can anger both the buyer and the seller?not to mention get themselves into some very awkward and costly situations'by flipping real estate. However, that doesn't mean it can't be done.
Flipping is simply the quick selling of a property that one has just purchased. The sale may take place that very day, or even at that very closing. The idea behind this practice is, if a property appreciates and I'm just going to turn around and resell it at a profit anyway, why wait? Why not buy up a whole bunch of properties, sell them quickly and make a ton of money?
See the allure? It can be done, but it is a tricky business. You cannot be a successful flipper without using some finesse. For instance, many people think they are being hugely clever by working the seller and the buyer against each other. The flipper, who sets himself up as a middleman without the knowledge of either party, actually gets the seller to agree to sell to him, then runs to the buyer for the cash, from which he pays the seller. Using this method, he makes the purchase without even using any of his own cash. Afterward, he simply pockets the difference.
But if he has sold a property to the buyer that isn't actually his, and the seller learns what is going on, there could be trouble. The seller, aware that the flipper is in dire straits, will probably up his price. The seller now knows the buyer is expecting that property. It is even possible that the flipper has sold the property to the buyer and is then turned down by the seller. This puts the flipper in the position of having just sold something he can't deliver.
According to Ken McElroy, author of ?The ABCs of Real Estate Investing,? there are, however, companies that flip very successfully. This is because they follow a few simple rules, such as never selling something they haven't actually purchased. On the surface, that sounds like such a basic idea, it is not necessary to mention it. However, you would be surprised if you knew the number of people who try to get away with not following this simple rule.
The companies who flip will resell a property that very day if at all possible, but they don't sell at the very closing where they purchased the property. Instead, thy use mailing lists they have built over time to send out bulletins that they have a property for sale. It can cost hundreds of dollars to get the word out and arrange meetings. It can also require an entire staff to do it quickly enough to make it pay off.
Because of those particular limitations, it is often not lucrative for an individual to attempt flipping properties, although, conceivably, a particularly savvy individual could indeed make it pay off. The question is, is it a good approach for you?
If the Chicago market is slow, you can yet sell your property if you make your listings and signs professional and attractive. Make sure that your circular is intriguing and well put together as well. Even when the housing is market is slow, you can still be selling your investment property quickly, if you follow a few basic steps:
It's amazing how many listings have fuzzy photographs, unattractive pictures, or little or nodepiction. Make sure that your MLS listings are interesting and really summarize the benefits and the attractions of the house. Make sure that the pictures are crisp and reveal the best possible colors and angles. Use Photoshop on your pictures to remove any junk from the front of the home, any fallen leaves, or any gray skies that happened to be there when you are taking your snap.
If you're hosting an open house, use arrow signs on a main street. If your investment house is a little out of the way, you'll have to use dozens of signs in order to direct people from the nearest main road all the way to the open house. Consider tying balloons to the sign on the road, or use vivid colors or large font to make sure that drivers see your sign.
Every hardware store retail pre-made ?for sale? signs that allow you to simply write in a phone number. Elude using these signs. They look substandard and unprofessional. Instead, have your signs professionally made, and make sure that you get a solid metal framed sign that comes with a flyer holder. This allows you to put a small flyer for the property right in the sign. Even when you're not there having an open house, people can drop by and take out a flyer to take home with them.
Make sure that your flyer is full-color and includes high-resolution photos of the interior of the property. If you want your investment property to sell, make sure that the copy is very exciting and summarize all the benefits of the home. Allow your tenants or potential buyers to really imagine themselves living in the property. Don't be afraid to use adjectives or to invite people to ?imagine yourself sitting on the deck of this wonderful Victorian home?.? that is the sort of writing and the sort of description that will get people interested. Don't be afraid to let your traits shine through when writing your brochure.
Both Alex Anderson & Robert D. Thomson are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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