Flipping houses wholesale: a real estate investment strategy where the investor scouts out good deals on property and enters into a purchase contract, but assigns (flips) it to another buyer before original contract is set to close, thereby avoiding spending his/her own money. Profit is (theoretically) gained by scouting out a property below market vale, and selling at an increased price. Wholesale flipping gained in popularity over the past five years because people liked the idea of making quick money in real estate without using their own money, and the market was filled with foreclosures and under market value homes for sale. However, in 2017 the good deals are harder to find and serious wholesale flippers must look outside the most popular metro areas.
You're here because you want us to tell you flipping houses wholesale will bring you AMAZING results, and you're going to enjoy spending Christmas in Tahiti!
LIES. ALL LIES. I'm going to share THE TRUTH with you.
H E R E ' S T H E R E A L:
There are MORE people making money "coaching" and "mentoring"
on flipping houses wholesale and selling their "learn wholesale flipping"
business systems and courses than there are people actually
making any money DOING wholesale flipping!
You could spend yourself into oblivion buying all the neat-o
"I just made $10k, you can too" systems, e-books,
mentoring packages, mp4s, etc.
BE WISE. And keep reading:
Making money in real estate, like with everything else in life, takes work and knowledge. If you are new to real estate and wholesale flipping, you need to be smarter than the 3000 OTHER people in your area who also bought that same wholesale flipping system, all those coaching hours, spent countless hours researching online etc.
Who are all the other people out there trying to find these same great deals you want to find? They are your mentors! They are real estate agents! They are experienced big-pocket cash investors that don't rely on paying for these "systems" and having to assign contracts over quickly. They know how to spot a great deal, buy it successfully, and sell it for a profit. Period.
This is 2017. Did they tell you? We're almost even with the high values we saw in 2007, just before the market crashed. No, we aren't expecting another crash anytime soon. But our market values are very healthy and continuing to rise. Factor in the VERY low foreclosure rates we have now, and the deals that make wholesaling profitable are RARE.
YES, RARE. They won't tell you the truth because they want to keep selling you more stuff. Where were you five years ago when the $250k condo today was selling for $95k just after the crash??? There were EXCELLENT DEALS all over the place even up until last year. Now? Even foreclosures are selling at market value.
It's easier to tell you where NOT to waste your time. Don't look to the MLS (see story below). You probably won't have luck with For Sale By Owners either.
Your focus should be DISTRESSED homes and pre-foreclosures. PERIOD. Scout out the homes that need roof repairs and other big updating projects.
If you don't know what an average roof install costs... you are at a major disadvantage. If you can't look at a house and estimate the cost to put in new flooring instantly, you're at a disadvantage. If you don't know how much it will cost you instantly, to have the house repainted, you're at a disadvantage. You are competing with professionals that know all this stuff, have done all this stuff over and over and made money at it. Information, knowledge, and good instinct is key to success in this real estate niche.
Not discouraged YET? Keep reading:
If your mentor, coach, $300 "system" tells you to use the MLS, run. RUN FAST. Do NOT pay any more money or waste any more time!! They are selling you load of garbage. Why?
We laugh.. We, licensed real estate agents that receive these ridiculously low offers on our listings. We see them and know instantly: "another wholesale flipping offer".
-We know it's you, because you want to be able to assign the contract to someone else before closing.
-We know it's you, because you want plenty of loopholes to get out of the contract before closing in case you can't find a buyer to successfully flip to.
-And we know it's you, because you tell us you aren't working with a realtor so we can earn commission for both sides of the transaction. An incentive that sounds great in theory... until you factor in licensing ethics. You think that we'll somehow push our seller to take $100k LESS than what they are asking for, in the hopes that we greedy real estate agents will influence them to your offer. So we get the extra commission pay out.
A true story (and example of the OTHER side of what you're being taught):
April, 2017. I list a great house for $420k. Beautiful, great condition, new roof, awesome area. It goes on the market on a Tuesday. By Friday morning I've received three of these "wholesale" offers all for amounts lower than $350k.
The offers are all on the same, normal Florida Realtors contracts, but the emails say the buyer isn't working with a realtor and I'll get both sides of the commission. Sounds good for me, right? But they are offering almost $100k BELOW asking price! So I laughed. And laughed some more.
As a licensed real estate agent, I am obligated to present all offers to my seller (even the ridiculous ones). And I did present the offers to them. And believe me, the sellers laughed too. Why does everyone find these offers so funny?
Because at the same time, we were receiving FULL PRICE offers! And the house sold for exactly what it should have, fair market value. As it was listed on the MLS.
Flipping houses wholesale isn't a system made to waste your time on MLS listed properties. It's made for knocking on doors of decrepit old properties that are either in pre-foreclosure or so distressed, the owners can't afford to make the repairs and need to sell. THOSE properties make great deals. IF you're knowledgeable about scouting out good deals, eyeballing repair costs, have the connections to get great deals on these repairs or expertise to do it yourself, and are confident that you'll have a buyer to flip to, you may succeed. But you need to get to that level!
The above story happened in Miami. And trust me, I've been in real estate for over 20 years... spending money and time with the dream of flipping houses wholesale in Miami in 2017 is not your idea.
But if you are determined... keep reading:
Go to the more run down areas that are still experiencing some real estate value stagnation. Go to the areas that had homes built in the 60's and 70's that are now in need of major repairs and improvements. Look at homes that were built in the 80's and haven't had a new roof installed yet, as most of those will have roof leaks inside and be in distress at this point.
Those do exist.
But you'll have to knock on doors and use bandit signs. They wont be on the MLS or FSBO. Those sellers know the market value, and know there are tons of great, qualified buyers in the market right now that WILL pay market value. You're looing for the owner who doesn't know the current market value, is too underwater to care about market value, or is in some sort of desperate state.
Discouraged? Don't be. Think of it as market research. Being realistic will end up helping you find your niche. You wouldn't go open a restaurant on a block with SEVEN OTHER restaurants! Why? Too much competition. So where do you go?
Flipping houses wholesale outside of South Florida is a WAY better idea than focusing on Miami or Fort Lauderdale. These areas are completely saturated with professionals all vying for the same few great deals (if any great deals still exist!). Florida is huge, and is FILLED with smaller towns that are still experiencing lags in market value revitalization. Find great deals in those other areas, and flip to buyers IN Miami and Fort Lauderdale!! There are tons of people looking to move out of South Florida to somewhere more affordable. There are TONS of investors that are looking to buy good deals on rental property. Your buyers most likely live in a metro area, but they WANT deals that make them money. The buyers you want to flip TO... know the good deals are NOT in South Florida anymore. Be of service to them, go find the good deals and bring them back!
Learn where to research for pre-foreclosures, county auctions, distressed areas and neighborhood homes. Start a smart, strategic fact-finding mission on a specific group of potential houses. Develop a strategic plan to get the owners to sell to you. Get your budget and ARV numbers all planned out. Then develop your pitch, to start finding your flip buyer.
You can spend big money, or tons of time googling "flipping houses wholesale", listening to audio programs, watching free youtube videos, buying big money "if I can do it, so can you" courses. But is all that really necessary?
Depends if everything we told you above has discouraged you. Or if you still think you have what it takes for successfully flipping houses wholesale. ~we wish you luck.
Find a great deal? Email us, maybe we'll be your next buyer!