Before we get into it, let’s get the correct terminology, what does fix and flip mean? Basically it comes from the term used in the Real Estate industry “Flipping”, which describes residential redevelopment of distressed or abandoned properties or neighborhoods, and it’s usually used as both a descriptive term for schemes involving market manipulation and other illegal conduct, and as a derogatory term for investing strategies!
In the case of a Real Estate strategy, the term fix and flip will fall into 2 categories, the first being when the flipper buys a property for a low price and resells afterwards for a higher price in a rapidly rising market, meaning they could get away with it, as time makes the property more and more expensive, and there’s the other side, buying a distress property for a lower price, fixing it and then selling it for a higher price in a short span of time.
Both strategies work perfectly fine for investors, and tend to be highly profitable, since with the first option, if you buy a discounted property in a fast growing neighborhood, to sell it a few months later, you can get a big margin of profit, especially if it’s in a desirable area!
The repairing side of it, can be very attractive, because although there’s more work to be done in the property, the profit could be a bit larger. Usually the reason why people tend to go through this route is the price point, and the sellers can go very low on it for a variety of reasons, one of them being the property needs far too many repairs and renovations while they currently don’t have the time nor the money to perform them, they sell, or because the owner needs to leave the city quite quickly and wants to sell ASAP, sometimes the second reason tends to be better, because the property probably needs some updating and slight rehab, and you can still profit largely from it.
Here in IRG Corporation we use both scenarios depending on the property we have in hand, if the numbers make sense, and if the place is highly desirable. Sometimes you can apply to both strategies, get a property in a rapidly growing place, do some rehabbing and renovating for the best ROIs, so while you’re fixing you’re also holding in the property till is ready and the market value has risen as well as the final asking price.
We have done many properties following this strategy and the results are mind-blowing, and expand your possibilities of profiting after the property is done, whether you want to sell it or rent it, it depends on you, but this technique works great for either!
If you want to be updated on our latest rehabs, deals and sells, do follow us throughout social media as we’ll be updating on them, alongside with giving you important information regarding the Real Estate world!