A new trend that could really change the game for the real estate industry investors in this new era of remote working is micro-flipping. Unlike flipping, it’s faster, needs less investment, and works best with technology.
I’m sure a lot of you are familiar with the term ‘micro-flipping’ and have also read about it a lot, but for the few uninitiated who are still oblivious to the term, let’s briefly look at its objective, principles, strategy, and what makes it worth a try for investors.
The Objective of Micro-Flipping
The main objective of this investment tool or strategy is to get deals done at lightning speed. With hardly any investment to make, the objective here is to get as many deals as quickly as possible.
The Basic Principle
The basic or the underlying principle of micro-flipping can be compared to that of traditional wholesaling. The only difference is that it can be done remotely.
You identify distressed or undervalued properties here too, or motivated sellers, acquire and quickly get on with selling them off to investors or interested buyers.
However, don’t expect too much of a profit margin here, because the aim is volume sales.
The strategy uses technology as its main tool and hence it is for those looking for passive income as opposed to actively getting on to the streets, driving for dollars, and door knocking as in traditional wholesaling.
What Makes It A Must-Try?
This is not just like any other trend that vanishes within days of its advent. It’s a trend that seems to be turning tables. This could be due to many reasons. The topmost being the way the deal is set up.
Read on to find what makes this investment strategy a hit with investors:
1)Purchase to Sale in Just A Few Days:
This is a faster process like we’ve discussed but it is available only through specific data sets. The whole transaction process is set up in a way that allows the ‘micro-flipper’ to go from buying to selling within just a few days.
Tip: You can have a buyer ready even when buying the property so that you are not stuck with a property.
2) Suitable For All Investors:
The micro-flipping business model is suitable for all kinds of investors, big or small. The only difference would be in the data sets being used. No driving around or door-knocking needed.
The data can be accessed for properties across the country. There’s no restriction on the location, and a micro-flipper can be located anywhere. The data that the micro-flipper analyzes will comprise information on both sellers and buyers, making life easier for the investor.
Tip: If you are a technology and data-driven investor then micro-flipping is your cup of tea as the data that you access is actionable as it will include direct contact details of the buyer.
3) Stable Income:
While we said that profit margins won’t be high, it is also worth noting that faster deals also mean more deals and this means a continuous source of income. Unlike flips where the investor has to wait for a once-pay-off deal, a micro-flipper will have to settle for smaller margins. How profitable this method depends on where you are investing.
Profits can still be pocketed provided you seek good undervalued properties.
Tip: Keep the momentum going and let the deals fall in consecutively.
4) Less investment, Less Risky:
This is an important aspect of micro-flipping and it is what makes it the most lucrative. Micro-flippers don’t really rehab an investment property and thus the risk surrounding the investment is much lower.
Property refurbishing can be the riskiest part of the real estate investing process considering the various variables that need to be worked together to put up a home that looks worthy of buying.
With no repair, no contractor, micro-flipper line up buyers even before they acquire a property.
Tip: Use quality data tools like BatchLeads that has the largest and the most reliable pool of motivated sellers and buyers.
Micro-flipping is garnering a lot of attention, especially among young investors thanks to its unique yet traditional approach. The property margins though not so huge as in a flip, where you get the whole house renovated, with the right tools you can make good profits without sweating it out too much.
So, what are you waiting for, weigh your pros and cons and give this trend a try and widen your horizons!