The Best Type of Real Estate Flips

Real estate flipping is not a one-size-fits-all model. Earlier blogs have mentioned that intelligent real estate investors do what is best for the property. By doing so, you optimize the deal, and all parties are satisfied. But the creativity of real estate investing provides a keen investor with options.  

Choosing the best option makes all the difference in maximizing profit and minimizing cost.

Most real estate investors use three common flipping strategies.

These strategies include what Glenn Schworm calls “An Easy One,” afterward, we will explore Cosmetic Flips and the As-Is Flip.  

In addition, we will explain what new real estate investors should avoid when considering a deal.

GLENN SCHWORM’S “AN EASY ONE” STRATEGY

An easy one is a term that suggests a deal where the real estate investor can contract the home and do minimal renovations.

These renovations are more like repairs. Afterward, they sell the house on the open market. For instance, “An Easy One” could take the form of:

  • A house in need of new screens and front door
  • A house needing a new roof
  • A house may need new front yard sod and a few bushes
  • Possible replacement of water heater
  • Maybe a new garage door opener
  • As you can see, the repairs are very minimal. Even a roof is quite affordable as many roofers will accept full payment at closing, especially in hot markets. 

    This flip type is easy because the work is more repair or maintenance-driven, not structural. 

    Most investors who get “An Easy One” are in-and-out of the deal within 15 days. Quick, easy, and in no way dirty. 

    TEN TIPS FOR THE COSMETIC FLIP STRATEGY

    Cosmetic Flips are beloved by many investors. One gets a sense of change and improvement as an investor doing cosmetic flips.

    These types of flips beautify the home and can reap the investor a sizable profit. Some of the work involves:

    1. Painting the exterior of the home and redoing the landscape.
    2. Painting the home's interior, focusing on the kitchen.
    3. Upgrade cabinets or renovate existing cabinets if of good quality.
    4. Replacing outdated countertops with more contemporary options.
    5. Changing sinks, range, installing convection ovens.
    6. Creating user-friendly pantry spaces
    7. Making sure the owner's suite is comfortable and the bathroom crisp.
    8. Ensuring the backyard is presentable and open for potential buyers to envision what they want to do with it.
    9. Clean the garage, and if possible, paint the garage floor.
    10. Remove all dead trees, shrubbery, and grass.

    Cosmetic flips beautify the property so that people feel at home when they enter and do not want to leave. 

    An excellent cosmetic flip is a kitchen and then the bathroom. When these two areas are updated, clean, and beautiful, the home will sell quickly.

    THE AS-IS FLIP STRATEGY

    Probably the simplest of the three common flips is the As-Is Flip. This flip involves no labor on your part other than contracting. 

    The real estate investor contracts the home, places it on the market, and sells it.  The buyer understands that anything awry in the home is their problem, not the seller.

    In hot markets, As-Is buys transpire daily. When an investor is in a hot market:
  • They may contact the home and secure the contract with earnest money.
  • Some investors also place a contract lien on the home to prevent the seller from entertaining and contracting with another investor. Good protection.
  • While the home is awaiting closing, it can remain on the market.
  • In hot markets, many homes will sell within a day or two.
  • Some investors get a contract before the closing of their initial contract.
  • Some investors get a contract before the closing of their initial contract.
  • If so, an excellent real estate investment title company will arrange a double close.
  • As you can see, the As-Is flip is ideal in hot markets; however, contracts need to be written not to mislead potential buyers. 

    They should get an inspection and know what needs repair in the home before closing. 

    Some buyers like As-Is buys because they enjoy fixing up and renovating their own homes. 

    Many will wait a few months and sell it – good times for all.

    New real estate investors should be cautious. There are deals one needs to stay away from in terms of flipping when a home needs significant renovation. This means:

  • Foundation repair
  • Fire damage
  • Water and impending mold damage
  • Home is in such disrepair it requires complete gutting
  • Major plumbing issues
  • HVAC replacement
  • Outdated electrical wiring
  • Why should these be avoided at the beginning of your real estate investment career? 

    These flips require expertise and a network of reliable contractors that you will not have at your disposal initially. 

    Furthermore, these flips take anywhere from 90 – 365 days. That’s right, and these flips can drag on for a year and sometimes more.

    GET READY TO START MAKING THE BEST TYPE OF REAL ESTATE FLIPS

    Should you run across a flip of this nature and the margin is good, why not contract the home and wholesale it to a seasoned investor? 

    Remember, wholesaling is a form of flipping; it’s just paper-pushing, that’s all.  Who said making an extra $5000 to $15000 per contract is wrong? 

    Let someone who knows what to do – do it. 

    Remember, the best flip is the one you can handle because it matches your experience level and gets you out of the deal quickly.

    Glenn and Amber Shworm have taken much of the guesswork from their experience as real estate investors. 

    You don’t want to guess about anything; you want to know for sure. 

    Watch Glenn’s video,The Best Type of Real Estate Flips, and learn more about starting your budding enterprise.