1) Flipping Real Estate When people think of flipping real estate they most commonly associate this with buying a home fixing it up and selling it for a profit. This can be done however the margins are often very low and most of the money is made based on the fact that you the investor was able to acquire the home at a very low purchase price. This means the entire investment strategy is based on being able to find a great deal and that makes this type of invest very difficult to find in many real estate markets. Finding these deals is posable and we have hapled may investors succesfully flip homes over the years.
The other method used to flip property is more sustainable through a verity of real estate markets. If you the investor are able to find a multi unit building that is in need of repair or is underutilized you can buy the property optimize the rental income and the property will sell based on the income it produces.
For Example: An investor buys 2 large row homes in need of work in Downtown Frederick, MD for $450,000 and spends an additional $300,000 on renovations to total $750,000. The investor renovates the previously empty buildings and now has 2 commercial units that rent for $1,000, 6 apartments that rent for $850 each and a 4 car garage the rents for a total of $400. Once renovated this property produces a gross income of $89,800 per year. You then deduct the estimated yearly expenses (around $9,000) and you have a net income of $80,900 per year. In a down market this type of investment property should sell at and 8% cap rate. ($80,900 / .08 = $1,011,250 in gross proceeds less the $750,000 in expenses leaves a profit of $261,250.)
This type of investment requires more cash buy is safe because it has 2 exit strategies. The sale of the renovated propertys for a fast return or long term ownership of an mixed use income producing multi unit rental property.