Flipping Properties for Maximum Profit

Flipping properties is the act of buying a home property and selling it off for a higher price. In most cases, the flipper will renovate and improve properties to increase their value and make them more attractive to buyers.

Flipping without Taking Ownership

You can avoid the problems that can come with taking ownership but not finding a buyer by securing a buyer before you actually purchase the property you want to flip. In the current market, your best bet may be to try to find a developer or an investor who is willing to agree to this deal. Once you buy the property, you immediately resell it to the buyer you secured. You get to keep the profit and, because the transactions are performed back-to-back, you can argue that, technically speaking, you never owned a property at all.

Optioning the Property

The term "optioning the property" means that you rent out the property you want to flip to a potential buyer for a certain number of years. At the end of that period, the potential buyer has a right to purchase the property for an agreed upon price. You will be able to earn profit regardless of what happens. If the buyer chooses to exercise the option, you will be able to earn profit through both the sale and the rental payments. If the buyer decides not to exercise the option, you will still earn some profit and, once the prospective buyer moves out, you will be able to sell that to someone else.

Adding Purchase Conditions

You can also entice the potential buyers by adding purchase conditions. Purchase conditions are conditions within the sale contract that allow buyers to renegotiate the terms of the lease. For example, "subject to inspection" purchase condition stipulates that the buyer has a right to adjust the purchase price depending on the results of the inspection of the property you want to flip. If the inspection results do not meet the buyer's standards, he or she will have a right to ask for a lower price. But even if you do not earn quite as much money as you hope for, you are still much more likely to be able to flip the property for profit.

There are many purchase conditions you can choose from. If you have any questions about them, consult a real estate lawyer. You should also have the lawyer write the purchase conditions into the sales contract and check to see that every aspect of the contract follows the law. That would allow you to avoid potential lawsuits and other legal pitfalls in the future.  

blog comments powered by Disqus