The first thing going through your head right after reading the title is Bullsh!t. But take some time to read this post and I will show you how you can start quick flipping real estate with no money. There are a few things you are going to need in order to do this and one of them is not a real estate license. We will go through all of this and I will tell you exactly how you can make $5,000 to $10,000 per deal. Imagine being able to do just 2 deals a month. You could do 2 deals at the beginning of the month and be on vacation the rest of the month!
The first thing you need to do for quick flipping is find BUYERS. These are going to be the real estate investors that want to fix and flip the property. There are a number of ways that you can get emails of investors in your area. One of them is through Facebook groups. Another way is www.biggerpockets.com. Try to get at least 20 if not more. I would try to get as many as I can. The more you have the more likely you are going to be able to quick flip a property. You need to know what areas of the city they invest in, how much their budget is(can’t send them $300,000 houses if they can only afford $100,000) and their e-mail address.
Find Properties and Evaluate Them
Now you need properties for quick flipping! Not only properties but these properties need to be specific. First they cannot be up for sale. That doesn’t make sense right? Hear me out. You need to find properties that are not on the market, if the property is on the market the investor can just go straight through them. Try to be the only person that knows this property is sale. You can find these properties by posting signs that say you buy run down houses. Try checking with your local banks and see if they provide houses that are in trouble. Things of this nature. Any property that you get you need to start the process right away.
The process is checking the property out. You need to determine how much the repair costs are going to be. If you cannot do this on your own you can hire a contractor or a friend to help you. You are not fixing the property itself, you just need to know the repair costs for your ROI calculation. ROI means return on investment. Most investors want 20% or more in ROI. So if they spend $100,000 they want to see $120,000 come back to them.
This is how you calculate the ROI.
Equity / All costs
For example, A property was purchased for $100,000. With all the repairs and expenses the investor spent $50,000. Total invested is $150,000.
The after repair value (ARV) is $200,000. This means after all repairs are done and the house is fixed up it is worth $200,000. So the equity in the house is $50,000.
$200,000 – $100,000(Cost) – $50,000(Repairs) = $50,000
$50,000(Equity) / $150,000(Total Cost) = 0.33 or 33%.
As a person quick flipping you need to know how to make your $5,000 to $10,000 per deal. You have to assess the repair value and use comparisons around that neighborhood for the after repair value.
Make Your Profit
Looking at the example above it doesn’t leave you much room to make a profit. This is why you have to evaluate a house before getting it under contract(more on the contract later). Lets take a look at another example:
Estimated Repair cost: $5,000
After Repair Value(ARV): $90,000
With this example I can already tell we have room to work with. If the repair cost actually is $5,000 which is something you need to make sure.
Total cost is $31,000. Equity is $59,000.
$59,000 / $31,000 = 1.90 or %190.
Here is where you make your money quick flipping. Lets recalculate with giving yourself $14,000.
$45,000(Equity) / $45,000 (Total Cost) = 1.00 or %100.
You are extremely happy because you just made $14,000, the investor is happy because he made a %100 return on his investment and the homeowner is happy because their house is sold! Literally everyone wins!
Ok. But how do I do it with no money?
Ok hold your horses. So after you did all of your calculations and you realize it will be a good property for quick flipping, honestly this wouldn’t take very long, you put the house under contract. This is you signing a purchase agreement with the seller with an option to sell the contract. Make sure you use the correct Purchase Agreement that has right options for you. Then when you are selling to the investor you sign an Assignment Agreement. This document legally transfers all of your rights to the investor and releases you of any liability or obligation.
This is how quick flipping works without any money. You simply sign two contracts and pass the buy off to the investor. You will still need to go to a closing. But after all is said and done you can make a quick buck for bringing the two together!
I hope you enjoyed learning this little gem of information! I know some people search for years and years on how to do this. But we here at Passive Income Education have just shown you how! If you can find the investors, which shouldn’t be hard, then find the houses, then you can do this!
Want to learn more?
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