House flipping is a real estate investing strategy perfect for active entrepreneurs. Flipping is all about purchasing a dilapidated house, renovating it, and quickly resell for profit. House flipping is highly profitable as long as you do it the right way. There are various house flipping strategies and you base the strategy on the type of property available as well as the real estate market trend.
Flipping Houses Without Ownership
The first notion in mind when it comes to flipping houses is you have to purchase or take ownership of the property. In reality, you can flip a house even without taking ownership. How will this be possible? Well, the first buyer of the property must have ample time to put together a deal with the second buyer prior to performing back to back closing. This makes the flipper earn money from the deal. Who are the second buyers? Enter all of the data into the house flipping worksheet to see where the profitability is for the flip.
They could be real estate investors, developers, or anybody looking for a property. Optioning the property is something every house flipper should consider. Do not hesitate to place an offer and at least certain conditions to your normal offer. However, you have to keep in mind that adding buying conditions is not a one size fits all approach.
House Flipping Option type subject clauses to choose from:
• Subject to inspection – This is ideal for properties that have maintenance issues. While the inspection is pending, you as a flipper can work on lining up the second buyer. One of the benefits of “subject to inspection” is the opportunity to go back and renegotiate the price depending on the result or outcome of the inspection.
• Subject to financing – if you cannot easily qualify for full purchase but does not mean that you don’t qualify, the subject to financing is the best condition. The time arranging for financing can be used to put the second deal together. It is more like hitting two birds with one stone.
Basically, these two are the commonly used conditions or subject clauses. There are a lot more such as subject to partner approval, second to sale of second property, and the likes. Being a new real estate investor, you might find these clauses confusing. As you go along, you will be able to master the ins and outs of the business. Do not be afraid to consult an experienced realtor if you feel you have the need to.
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