In this post, I want to talk about our 1st Quick Flip.
Remember, with a Quick Flip, you don't fix up the house at all. You buy it and sell it again as-is, usually a few hours later. You don't make as much money as you would on a Cosmetic Flip or Fix & Flip, but it's more convenient and you can do more of them quickly.
Here's the story behind our 1st Quick Flip:
- We built a list of investors who we knew could close quickly with cash & were looking for investment property.
- We sent out letters to homeowners in multiple zip codes where we knew these investor buyers were looking for houses to purchase. In the letter, we offered to buy the seller's home quickly, as-is, & with cash. We knew this would likely appeal to sellers who had distressed properties that wouldn't be a fit for the retail market or sellers who just didn't want to take the time, money & effort to go through a retail sale.
- We received a number of phone calls from homeowners interested in selling their homes. On this first deal, the homeowner was interested in selling to an investor because he knew his house needed work and he wanted a quick, hassle-free, cash transaction (with no real estate commissions). He had lived in the house initially but then started renting it out to tenants. The tenants caused damage to the house & he knew a retail buyer would want him to make repairs that he really didn't have the time or desire to make.
- We negotiated a purchase price of $75,000 with a quick close & went under contract. We communicated with the seller that we were going to resell the house, after we bought it from him, to another investor in our investor network. He said to us, "I hope you guys make a lot of money!" Since he was getting the price & terms he wanted, he was glad for us make a profit as well.
- We hosted an inspection where we invited our investor buyers to the house. We let them know that we'd accept offers for 24 hours and then choose the highest and best offer the following day. We told the investors they needed to be able to close with cash in 2 weeks (which was on the same day we'd be closing with the seller).
- The next day our highest offer we received was $82,500. We went under contract with this investor buyer & the buyer deposited $5,000 in non-refundable earnest money at the Title Company.
- A few weeks later we closed both transactions on the same day. We bought the home from the seller that day and then sold the home to the buyer on the same day. Because we were closing both on the same day, the Title Company didn't even require that we bring $75,000 to close the first transaction. They said they could close the first transaction with the $82,500 that came in later in the day and then cut us a check for the difference.
- After taking out a few closing costs & closing both properties, the Title Company gave us a check for $7,445.
Pretty cool, right?
Notice that we didn't have to bring money to buy the house or do a remodel.
All of our cost in this transaction was in the marketing spent to send out the letters.
While $7,445 may be less than the $20-30k we could've made in a full Fix & Flip, think of how many $7,445 deals you could do each month! And with much less hassle!
That's why after our first Quick Flip, we started focusing on Quick Flips almost exclusively.
We found that these better suited my schedule as a pastor than managing full remodels.
And we also felt it would be much easier to turn into a business with other people managing it for us.
Maybe you've shied away from flipping houses because you didn't want to have to manage a remodel, but have you considered Quick Flips?
Even just doing a couple of these each year can provide significant extra income for your family!