Flip It Good! – How to Make Bigger REI Profits in the Long Run
Flip It Good! – How to Make Bigger Real Estate Profits in the Long Run
If you’re looking to get out of debt, save for the future or even set some money aside for a rainy day, there’s no investment more rewarding than real estate. Others may think opening a business to accrue long-lasting earnings is the best way to go, but real estate investing allows you to gain returns quickly rather than having to wait years to finally turn a profit.
What’s the Best Way to Go For REI Profits?
Many are under the assumption that if you have a little money, the best thing to do would be to invest it in a property which you can rent out to others. Then, all you have to do is sit back and let the money roll in. Believe it or not, this is both a good idea and a bad idea.
Renting Is a Good Idea Because…
It is a safe long-term investment – There will always be people in need of a place to live. Renters will never go out of style or out of stock. And if your rental property happens to be in a desirable neighborhood, you will have renters lined up around the block to fill out an application.
No major rehab work is required – Your property only needs to be inhabitable, not rehabbed to the nines. There will be some repairs over the years that need to be done, but overall you won’t need to completely gut and redo the property.
Renting Is a Bad Idea Because…
It takes a really long time before you see any kind of real profit – Suppose you purchase a three-bedroom, two-bathroom home in a good area for $160,000 and competitive rental rates for your home sit around $1,400 a month. If you’re paying back the loan purely from the rental income, you will have to wait a little over 114 months to pay off the loan and start making a profit. That’s nine and a half years before you start making money, and that’s not including additional costs such as interest, taxes and home repairs.
Let’s face it… Being a landlord is a headache – You now have the responsibility of not only maintain a property, but you have to deal with renters as well. You will have to be at the beck and call of other people to come and make repairs for as long as you rent out the home, unless you decide to outsource repairs. But even then, it will cost you more money to have someone else handle any issues, which will eat away at your overall profits.
In the age of instant gratification, the way to property satisfy your desire for financial freedom, the best way to go in real estate investments is to fix and flip properties.
I’ll say it again…
The Best Way to Go for REI Profit Is to Fix and Flip Properties
Investing in fix-and-flip properties (properties in need of repairs which you buy at a lower price and fix up and resell at a higher price) is a far more enjoyable, more interesting and more rewarding tactic for gaining profit. Before the housing market plummeted in 2008, many individuals took advantage of the excellent returns on investment buy-to-sell properties had to offer. Once the housing market took a hit, many backed away from this practice, deeming it too risky. Now, the housing market is more stable and profitable than ever and hundreds are jumping on the fix-and-flip bandwagon. With well-known HGTV shows such as Fixer Upper and Flip or Flop encouraging this type of investment, flipping houses is regaining popularity worldwide.
Fixing and Flipping Properties Is the Best REI Investment Because…
You earn a profit quickly – The process of rehabbing and reselling homes is designed to move fast. Hard money loans typically have three to six month terms during which you purchase the property, fix it up and sell it on the MLS. Once you sell the property and repay the loan, you pocket the difference. And if your home sells quickly, you get the money into your bank account all the faster (and paying less interest as a result!).
You get to learn new skills and work creatively – Through every flip, you will learn more and more about the real estate market, learning which areas are the best for finding properties and which ones to avoid. You will also learn key negotiation tactics and methods to close deals quickly. Once you have purchased the property, the real fun of rehabbing begins. You get to become a designer, choosing which items to rehab and upgrade to ensure your home is the must-see house on the block. You also get to learn marketing strategies to get the word out about your property and see which tactics lead to faster sales.
All it takes to make a lot of money… is a lot of money – Once you execute your first deal, you can do whatever you want with the money left over. But the wisest investors take their earnings and put them towards the next, even more profitable deal. Let’s give you an example:
Theodore G. found a property in Harvey, LA that he wanted to rehab and resell for a profit. He came to Do Hard Money and thanks to our help, he was able to purchase the home for only $40,000. We covered 100% of the property purchase price and rehab costs of the home and he pocketed a profit of $27,107. He used that money and applied it to an even more profitable DHM deal the next year. He found a home in New Orleans he was able to purchase for $52,000. We covered 100% of the property purchase price and rehab costs but this time he only had to come to the table with $5k cash-to-close. He made a profit of $37,303 on this deal. Instead of sticking with $27,107 and walking away, Theodore had his money work for him through his real estate investments and he made over $64,000 on both properties. For an in-depth look at Theodore’s experience with Do Hard Money, click below!
We also have current investors who are perpetuating their real estate income to grow larger and larger – pretty soon, they won’t have to work a boring 9-5 job at all! One excellent example is Angela H. who is currently doing two profitable deals in Illinois with Do Hard Money. One deal has a sale currently pending and looking to make her an overall estimated profit of $48,010. Another deal is undergoing a rehab and is looking to make her an estimated profit of $41,191 when completed.
If you play your cards right, investing in fix-and-flip properties can become a very lucrative source of income, freeing you up to pursue whatever you want to experience out of life. There is a bit of a learning curve, but fortunately, this is where Do Hard Money comes in.
Every tool and resource you will ever need to flip a profitable deal – In addition to unparalleled customer service and support, we offer an all-inclusive package of REI tools and resources to help you become a professional and successful flipper in no time at all.
Ryan G. Wright is a successful real estate investor who wanted to help others find financial freedom, so he founded DoHardMoney.com. Through DHM, Ryan is able to make investing accessible by providing training, tools, and funding for new investors. He has written four books and hosts the successful Income Hacker podcast. He has flipped hundreds of properties and has been featured as one of the top 20 real estate entrepreneurs by Yahoo Finance.