Flipping Houses When You Have No Money

Wholesaling

Wholesaling is a great process that allows you to make money off of a property without ever touching the interior. Wholesaling is the process of taking a property under contract, then turning around to sell the property for a profit. For example, you have a motivated seller that is trying to get their house sold. As a wholesaler, you purchase the house for $60,000. Once the house is under contract. You go on and sell that house for $70,000, making a $10,000 profit. 

Here are some tips for wholesaling:

• Be mindful of your contract. Be sure to make sure your contract allows you to sign the contract off to anyone of your choosing before the settlement date and will release you in the case that the property hasn’t sold. 
• Always have a marketing plan. This doesn’t apply just to real estate. The better the marketing you put out, the easier it will be for buyers and sellers to notice that your business exists, and will want to do business with you. 
• Find someone qualified. Your time and information is valuable. Be sure that anyone you involve in the process is qualified, and is going to help everything run smoothly. 
• Once you’ve made your proceeds, save them! The profit will be there waiting for you when you want to start your next project. 

The reality of wholesaling is that wholesale properties are tough to come by. The buyers won;t be knocking on your door the moment you buy off a property. Be sure to keep a watchful eye on the market, and a steady stream of ads. When the time comes to buy a property, you’ll be ready.  

Private Investors

If you are a natural born salesman and have convincing marketing skills, private lenders may be the way to go. Flipping investors will be able to finance your deal if they deem you worth their time. So, emphasise your marketing skills, and your ability to sell and renovate. Make sure the investors are aware that your inclusion is essential. 

What to look for in an investor:

• Make sure they’re qualified. Ensure their access to cash/loan products
• A good investor can communicate well. You will both need to be clear in your intentions for the property and how it will be handled. 
• Be realistic. Investors may not know the amount of work the equity partner goes through. Make sure you both have an understanding of each role and the weight of the job. 

Hard Money Loans

Differentiating between hard money lenders and traditional lending institutions can be a little tricky. In general, hard money lenders will offer loans on shorter terms, compared to the traditional lenders that can span from 15-30 years. Hard money lenders will typically keep it within 6 months and two years. 

Why you should use a hard money lender:

• Quick pre-approval: You will be able to know quickly whether or not you should move forward with an offer.
• Fast Funds: They can get you your money fast which, in turn, will allow you to start renovations that much sooner
• Low Credit: If you don’t have the best credit score, no problem. Hard money lenders require low credit scores and no income verification
• Interest-only payments: Keeps your monthly overhead lower

Each money lender is different. Each one is going to have their own set of requirements. But in general, these are what we found to be the same across the board.  

MMREsolutions specializes in wholesaling. We deal with private investors and hard money loans regularly throughout our business. If you are curious about flipping houses or want to get started in the wholesaling business, give us a call. You can reach us over at www.mmresolutions.com

By: Mike Pugliese