You can’t flip a house for $20,000+ anymore, right? Those days are over…
WRONG! You can still contract on the cheap… and make a ton of money on the flip!
I’ll let you in on a little hint: I just did it. $.26 on the dollar. Buyer in place. $20,000 profit. Wanna know how? Keep reading.
First, pay attention to what’s going on with the market. The market is booming, again. That typically means that seller-direct deals are scarce… but the profit per deal is… well… booming. That’s becoming the case again. Back during the first boom – 2000 to 2005 – deals weren’t that plentiful. But, when you got one, you made at least $10k, and sometimes upwards of $60k+. Hell, buyers were so eager to get their hands on a house where the value was rising through the roof, they were bidding up the price.
Now that was fun…
Things aren’t quite to that point yet. But, it’s getting really fun, again. So, lesson number one… pay attention to the housing market. When values are rising fast, people want to get in on it… even if they’re not in real estate. They will borrow, partner and do whatever they can to start building a portfolio of property. And, since these people have no idea where to find deals, who are they going to turn to?
You. The experienced ones will too.
Next, make sure you believe that you can get a deal under contract for pennies on the dollar. I mean, the lower you get that price, the more money you make. At worst, you increase your chance of flipping it. But, if you fail to believe you can get a deal at $.20 on the dollar, you can’t… and won’t. So, believe not only that you can… but WILL.
Third, offer less than what you’re willing to accept. For one, they may just take it. And two, it’ll give you room to negotiate. And, most likely you will end up getting it for cheaper than your ceiling, anyway.
And lastly, don’t get discouraged if some sellers laugh, or get offended, by your low offers. Wholesaling is a numbers game, and this comes with the territory. Most people are not going to accept your low ball offer. Just the reality of what we do. All you need to do is land one. It reminds me of what Tim Tebow said to his critics when he was entering the NFL draft. He said, “I don’t need every team to like me. I only need one.”
Before I got this deal under contract, I made an offer on another one. I offered the guy $20k cash. His reaction? I’ve already received offers for more and I won’t take anything less than $40k. OK, no problem. I sent him a contract, anyway. And, I moved on to another deal.
So, make your low offers, expect them to be accepted but be prepared to negotiate, and then go flip that house for ridiculous amounts of money. You can make more money on one flip than many American families make all year.
That’s the only reality you should focus on.