For those real estate investors who have the technological savvy to utilize real estate technology and pay great attention to detail, you can make a good return with the latest trend, microflipping. You do not need much money upfront, just some motivation, and you can flip a property in a few short days without doing any work yourself.

What Is Microflipping?

Microflipping Loans
Image via Flickr by All Western Mortgage

Microflipping is essentially the wholesaling of real estate in the digital medium. Based on information found online, microflipping allows for a quick, efficient way to sell and buy real estate without much capital investment or renovations. In microflipping, the micro refers to the speed at which the flip happens, meaning the investor doesn’t hold on to the property very long, usually a few days. Utilizing easily found data online and technological tools, investors can find, buy, and quickly sell undervalued properties.

What’s the Difference Between Microflipping and Fix-and-Flip

Many people are familiar with fix-and-flip, which involves purchasing homes, putting a lot of renovation work into them, and then selling them for much more money. This process is a lot of work in the renovations themselves, and finding a suitable candidate in a good area where a renter or buyer would be easier to procure. But, again, microflippers don’t fix up homes at all. Instead, they only find significantly undervalued properties in habitable conditions and then sell them almost immediately at a profit, days or weeks at most.

With most investments, the bigger the risk, the greater the reward, and in this situation, that’s no different. Wholesaling provides a more significant margin with more risk in renovation costs and finding buyers to ensure a considerable profit while enduring holding costs that eat into their return. Microflippers, on the other hand, don’t assume much risk, but then the potential returns are typically smaller.

How Does Microflipping Work?

Microflipping is just like any other real estate purchase, with a few notable exceptions. Like with any real estate purchase, you start with finding properties, and with microflipping, it isn’t just suitable properties but also undervalued ones. You’ll have to figure out where to get the funds needed to fund your first deal to get started. Many getting into microflipping don’t have a lump sum available, so they go with short-term hard money loans or transactional funding. Hard money loans are usually high-interest rate loans that require you to use the property as collateral. In contrast, transactional funding typically requires the end-to-end transaction already set up.

Unless you’re already a licensed real estate agent, you will want to partner up with one. You will need help with several aspects of the transaction, especially regarding the various contracts. If this is something you plan on doing a lot of, it may be beneficial to get your real estate license not only to save money but to allow you to handle everything yourself.

A variety of software solutions are available to help with this process. Make sure the one you choose has most of these attributes: 

  • Real-time availability for properties.
  • Filtering to find homes that are undervalued along with finding motivated sellers.
  • Updated contact information for the seller.
  • Accessibility via mobile devices for convenience.
  • Intuitive access to records to allow for quick and accurate assessments.

Since the entirety of the profit margin lies within the property’s purchase price, the negotiations take on an increased impetus and may require more effort and finesse. The key here is to find motivated sellers who need to unload the property quickly as they’ll be more open to negotiating the price. Once you have procured the property for the best price possible, you’ll move immediately to the flipping stage, and that’s finding a buyer. In microflipping, the investor will typically have a buyer lined up before even purchasing the property. That way, little to no carrying costs will be involved that decrease the profitability.

Pros and Cons of Microflipping

Like anything else, investments or otherwise, there are pros and cons to microflipping. The key is to evaluate the pros and cons and see if it is right for you. Here is a list of pros and cons to microflipping: 

Pros

  • When done correctly, the turnaround is rapid, a few days to a few weeks at most.
  • It’s an entirely hands-off process since there’s no renovation or work done to the home. The investor is merely a middleman.
  • Since microflipping is hands-off, the property doesn’t have to be local. Without any physical interaction required, you can buy and sell anywhere you like.
  • Capital needed to start microflipping is very low, only required to have a down payment on the home to get financing. In certain circumstances, you may even be able to borrow the down payment, reducing your upfront costs to nearly zero.

Cons

  • Investors must be tech-savvy. This may not be much of a con in this day and age because everything has become software and online-based. But for some old-school investors, this can be a hurdle.
  • Competition is fierce in microflipping. The low startup costs attract investors, especially those with little capital, plus you have iBuyers or large internet-based companies that purchase real estate, like Redfin and Zillow, that can flood the microflipper market.
  • Lower profit margins. The typical difference between market value and the undervalued price you can purchase a property is usually relatively small.

The Bottom Line

Microflipping is an excellent entry point for anyone looking to get involved in real estate investing. It’s an excellent way to make a quick profit without risking much capital. While it’s possible to microflip without using a software program, provided you are very knowledgeable about real estate valuation and the market itself, you will be more efficient and succeed with a good software solution. Either way, you must put in the work and research to make sure the area you are looking at is viable and profitable and the properties you choose are at the correct price point.

If you’re interested in microflipping and looking for financing options, reach out to the knowledgeable team at Titan Funding. We can help you determine if a hard money loan is right for your situation. Reach out to us today at 855-912-8318 or via our secure online messaging service. A team member would be happy to answer any questions you may have.

For those real estate investors who have the technological savvy to utilize real estate technology and pay great attention to detail, you can make a good return with the latest trend, microflipping. You do not need much money upfront, just some motivation, and you can flip a property in a few short days without doing any work yourself.

 

 

What Is Microflipping?

Image via Flickr by All Western Mortgage

Microflipping is essentially the wholesaling of real estate in the digital medium. Based on information found online, microflipping allows for a quick, efficient way to sell and buy real estate without much capital investment or renovations. In microflipping, the micro refers to the speed at which the flip happens, meaning the investor doesn’t hold on to the property very long, usually a few days. Utilizing easily found data online and technological tools, investors can find, buy, and quickly sell undervalued properties.

What’s the Difference Between Microflipping and Fix-and-Flip

Many people are familiar with fix-and-flip, which involves purchasing homes, putting a lot of renovation work into them, and then selling them for much more money. This process is a lot of work in the renovations themselves, and finding a suitable candidate in a good area where a renter or buyer would be easier to procure. But, again, microflippers don’t fix up homes at all. Instead, they only find significantly undervalued properties in habitable conditions and then sell them almost immediately at a profit, days or weeks at most.

With most investments, the bigger the risk, the greater the reward, and in this situation, that’s no different. Wholesaling provides a more significant margin with more risk in renovation costs and finding buyers to ensure a considerable profit while enduring holding costs that eat into their return. Microflippers, on the other hand, don’t assume much risk, but then the potential returns are typically smaller.

How Does Microflipping Work?

Microflipping is just like any other real estate purchase, with a few notable exceptions. Like with any real estate purchase, you start with finding properties, and with microflipping, it isn’t just suitable properties but also undervalued ones. You’ll have to figure out where to get the funds needed to fund your first deal to get started. Many getting into microflipping don’t have a lump sum available, so they go with short-term hard money loans or transactional funding. Hard money loans are usually high-interest rate loans that require you to use the property as collateral. In contrast, transactional funding typically requires the end-to-end transaction already set up.

Unless you’re already a licensed real estate agent, you will want to partner up with one. You will need help with several aspects of the transaction, especially regarding the various contracts. If this is something you plan on doing a lot of, it may be beneficial to get your real estate license not only to save money but to allow you to handle everything yourself.

A variety of software solutions are available to help with this process. Make sure the one you choose has most of these attributes:

  • Real-time availability for properties.
  • Filtering to find homes that are undervalued along with finding motivated sellers.
  • Updated contact information for the seller.
  • Accessibility via mobile devices for convenience.
  • Intuitive access to records to allow for quick and accurate assessments.

Since the entirety of the profit margin lies within the property’s purchase price, the negotiations take on an increased impetus and may require more effort and finesse. The key here is to find motivated sellers who need to unload the property quickly as they’ll be more open to negotiating the price. Once you have procured the property for the best price possible, you’ll move immediately to the flipping stage, and that’s finding a buyer. In microflipping, the investor will typically have a buyer lined up before even purchasing the property. That way, little to no carrying costs will be involved that decrease the profitability.

Pros and Cons of Microflipping

Like anything else, investments or otherwise, there are pros and cons to microflipping. The key is to evaluate the pros and cons and see if it is right for you. Here is a list of pros and cons to microflipping:

Pros

  • When done correctly, the turnaround is rapid, a few days to a few weeks at most.
  • It’s an entirely hands-off process since there’s no renovation or work done to the home. The investor is merely a middleman.
  • Since microflipping is hands-off, the property doesn’t have to be local. Without any physical interaction required, you can buy and sell anywhere you like.
  • Capital needed to start microflipping is very low, only required to have a down payment on the home to get financing. In certain circumstances, you may even be able to borrow the down payment, reducing your upfront costs to nearly zero.

Cons

  • Investors must be tech-savvy. This may not be much of a con in this day and age because everything has become software and online-based. But for some old-school investors, this can be a hurdle.
  • Competition is fierce in microflipping. The low startup costs attract investors, especially those with little capital, plus you have iBuyers or large internet-based companies that purchase real estate, like Redfin and Zillow, that can flood the microflipper market.
  • Lower profit margins. The typical difference between market value and the undervalued price you can purchase a property is usually relatively small.

The Bottom Line

Microflipping is an excellent entry point for anyone looking to get involved in real estate investing. It’s an excellent way to make a quick profit without risking much capital. While it’s possible to microflip without using a software program, provided you are very knowledgeable about real estate valuation and the market itself, you will be more efficient and succeed with a good software solution. Either way, you must put in the work and research to make sure the area you are looking at is viable and profitable and the properties you choose are at the correct price point.

If you’re interested in microflipping and looking for financing options, reach out to the knowledgeable team at Titan Funding. We can help you determine if a hard money loan is right for your situation. Reach out to us today at 855-912-8318 or via our secure online messaging service. A team member would be happy to answer any questions you may have.