When you think of “flipping” properties, you might imagine a scene from one of those popular network cable shows. A charismatic investor purchases a home that’s a bit worse for wear, executes a few key renovations, and stages the home for sale. In the end, usually after a significant ordeal, he or she almost always earns an attractive return much higher than what they initially paid.
What if I told you there is so much more to flipping real estate? Not all flips will require so much time and effort, and for many, you won’t even have to lift a paintbrush.
Read on for some potential avenues to diversify your portfolio with lucrative property flips.
Short Sales
Even in times of instability, there are opportunities for high returns on real estate investments. In a short sale situation, a financial institution will agree to sell a property for less than what’s owed on the mortgage. Usually this is due to a market value decrease, or a foreclosure on the home.
By taking advantage of short sales and foreclosures, investors can enjoy increased purchasing power on some amazing home prices. The rapidly closing time window provides a chance for smart investors to make a low offer and succeed. Still, remember to do your research on market values and prices in the area prior to making a commitment to a quick buy. It will take a skilled researcher to hunt down the most promising opportunities.
Wholesale
Are you an investor with your finger on the pulse of the local market? Do you have great negotiation skills? Then wholesale may be the real estate route for you. This means wrangling excellent deals on properties for other investors to purchase.
With the right knowledge and timing, it is possible to purchase “fixer-upper” or low-priced properties and resell them without having to complete any renovations. You can even invest virtually in some cases. People have many reasons for buying such properties. Keep your lead generation strategy on point in order to keep interested clients in the fold and see long-term success with wholesaling.
Commercial
Though homes are the most common, a flip doesn’t have to be a residential property. If you are willing to be patient and do your homework, you can likely find a steady stream of undervalued commercial properties – and interested buyers – right in your neighborhood.
Meticulous research will be required to determine the demand for the property, as well as the price you can charge. You will soon learn to gauge how valuable a property is to the buyer, based on what they want to use it for. For the right buyer, even a vacant lot can fetch a high return. Commercial real estate is not for everyone, but it offers many a chance to use their skills for profit and diversification of their investments.
The creativity and ingenuity involved in real estate investing are cornerstones of what makes it such a lucrative career. Time and cost commitments make home renovations out of reach for many investors. With so many different ways to make properties profitable, investors are never out of options.