How To Flip Houses With No Money
How To Flip Houses With No Money
But a lot of people have the false notion that you need money to flip houses. The truth is there's been much written on how to flip houses with no money. Even if you are a full time student earning less than $25,000 a year, it is possible for you to flip houses with no money and make a profit.
So what does house flipping involve?
As we have outlined previously, house flipping is simply a process where a person buys a house that is still requiring repairs and therefore can be bought and sold at a much lower price than its actual ARV (After Renovation Value).
For example, a house bought and sold for merely $150,000 could be flipped for $400,000 when all the renovations are done.
How to Flip Houses With No Money
So is it possible to flip houses without cash or if you have really bad credit?
The answer is a resounding yes. Over time, you can save up cash and fix your credit - but you don't need that to learn how to flip houses with no money. Having your own money certainly does help, but its not necessary.
If is that its very possible to make a very reasonable profit flipping houses without your own money. In fact, most hose flips are done with Other People's Money (OPM).
To learn how to flip houses with no money, follow these steps:
Look for and find an affordable house
It may seem obvious, but finding the right house to flip is the very first step. To do this, you'll oftentimes want to get a very motivated seller that is in a rush to get the property off his hands. Most likely you will find a property that requires a lot of maintenance and repairs but this is actually what you are looking for. A house that has been repaired and renovated typically is a difficult house to sell and flip for a profit.
Just make sure to do the right calculation so that you know the property's real value when renovations have been done. Once you've settled with a property make sure to get the contract under the house.
Secure an investor buyer
The investor will be the one actually paying for the house, not you. Getting out there and enlarging your social networks with face to face contacts through networking is very helpful when finding investors. You may need to shop around and get a list of investors before you seal the deal.
You'll then need to get a contract and then work out the two contracts for the deal between the seller and the investor to be valid and to make sure that the money goes through you.
Also it is best to go for an investor that buys in cash since they won't have to go through a bank or a lender for a loan. If they need to qualify for a loan, then this may slow down the whole house flip.
The Use of OPM (Other People's Money)
Once you have secured the money with the investors cash for sale and rehab, you have the formula how to flip houses with no money.
Oftentimes, you can even extend the contract with the investor by weaving connections to get the house renovated and then help them find a potential buyer. Instead of selling the house for just $220,000 you might end up selling it for $240,000 therefore earning a hefty profit for you and your investor.
The key is using other people's money to buy the house and fund the rehab. You don't have to fund any deal with your own money as there are plenty of private investors available to lend you the money to purchase and rehab.
In future posts, we will go into more detail on how to flip houses with no money, as this house flipping strategy is a an excellent way to get started flipping houses.