Realty411 Magazine Featuring Scott Meyers

You Can Sell A Property Without Completing Renovations By Lloyd Segal, Director Los Angeles Real Estate Investors Club, LLC A ctually there are several exit strategies available to you that would avoid completing renovations. For example, you could flip the property “as is” without performing any repairs or renovations whatsoever. Or, you could complete only the repairs that are absolutely necessary and then sell the property. Or, finally, you could completely rehab the house and then flip it. Let’s explore each of these strategies separately. 1. Wholesaling. If you enjoy the hunt for properties and are good at negotiating deals, you can make money without doing any repairs or renovations at all. Using this exit strategy, you simply track down a property, put it under contract, and then turn around and sell the contract (“assign”) to another investor for a profit. Once you establish yourself as a having contracts to flip, you'll have a ready source of flippers eager in taking wholesale properties off your hands. And, you’ll spend very little, if any, of your own cash! The process of finding properties and quickly reselling them to other flippers is called “wholesaling.” The advantages of wholesaling are simple: 1) You don't have to spend time and money performing rehabbing the property; 2) you’ll make money finding great deals for other flippers. The only disadvantages are that: 1) you won't make as much money on each deal, and 2) you could find yourself owning a house that you can't find a flipper to buy. 2. Repairs Only. In the alternative, you could make only the repairs that are absolutely "These investors don't have time to find properties, evaluate opportunities, negotiate deals, or rehab properties. But you do, so take advantage of it!" 25 necessary. But then, before you begin renovating the house, you could flip it to another investor. For example, you find a property in desperate need of cosmetic repairs: paint, carpet, and landscaping. It could also benefit from major renovations, but you don’t have the funds. It's the smallest house in the neighborhood, and if you built an addition (i.e. another bedroom and bathroom) you could bring its value in line with the other houses and make a handsome profit when you flip it. The problem is that you only have $15,000 to spend, and you need to flip the house quickly before the holding costs overwhelm you. In this situation, your best exit strategy might be to invest $10,000 in carpet, paint, and basic landscaping, saving $5,000 for holding costs (or contingencies). Then, when you show the house to an investor, he will see the potential in the property and pay you a premium as a result. In this way, you may be able to double or even triple your $10,000 repair investment.

Realty411 Magazine Featuring Scott Meyers | Page 25