2 ways to do a fast flip: The art of the real estate deal

by R J Palano | May 5, 2015 | Article, Operations

The real estate business avails itself of many opportunities with different types of properties located throughout the world.

Like any business, you must have goals and a business model. In our model, we focus on single-family houses as they are easy to understand and the most liquid of all real estate investments.

In our model we have four strategies on what to do with a property when we evaluate a potential opportunity:

Buy and hold
Rehab, manage and sell to investor
Rehab and retail to homeowner
Flip in “as is” condition to an investor

Today’s transaction was a flip.

Basically there are two ways to do a flip:

Get a property under contract and assign the contract to a buyer. This is the simplest way and typically involves only a small down payment on your part.
Sign the contract with seller and close on the property. Then market the property to a new buyer.

In today’s transaction, the property is located at 2730 Fieldstone – Conyers, GA.

My personal assistant negotiated over the phone with the out-of-town seller who was wanting to sell the house for $70,000, all cash.

Upon my visit to the property it was apparent that the comparable sales were in the $120,000 range.

The house has a pool and a great deal of stucco in terrible condition.

We didn’t want to mess with the stucco and the pool was in terrible shape. Nevertheless, this was a good opportunity, except the seller’s asking price was too high.

Two ways to do a fast flip: The art of the deal

The pool was in terrible condition.

I determined I could wholesale the house for at least $70,000.

Thus, I needed to negotiate with a motivated out-of-town seller.

I was able to get her to accept a $50,000 cash price and I marketed the house to wholesalers one week before closing.

We had about a dozen inquiries and we sold it for $72,500. We closed on the purchase side on a Tuesday and closed on the sale of this house by the next Friday.

These types of transactions can become the norm in a hot market like Hotlanta!

The key is to get the leads, understand the model, and take action!

RJ Palano
RJP@BuyCashFlowProperties.com

Categories | Article | Operations

Tags | Fix-and-Flip

R J Palano

RJ Palano is the acquisition director of BuyCashFlowProperties.com, a Tampa, Florida-based company that primarily provides turnkey houses for investors in the metropolitan Atlanta and Tampa Bay areas. His property management experience spans more than 35 years, and he has been involved in more than 3,000 real estate transactions in 12 states and more than 50 cities. Contact him at 813-495-3006 or rjp@buycashflowproperties.com.