Micro flipping In Real Estate – A Complete Guide

The real estate industry has become quite creative and new trends are taking over. The current famous trend is micro flipping. If you are interested to know about micro flipping and want to learn more about this investment strategy, keep reading.

In this article, top realtors in San Antonio have explained what micro flipping is, the difference from traditional house flipping, and how you can get started to make a passive income out of it.  

What is micro flipping?

If you suspect that micro flipping is a form of fixing and flipping form of investment, this investment strategy is the modern-day form of real estate wholesaling. Micro flipping involves using the data sets and technology to identify undervalued properties and after purchasing them, turning them around and selling them to the interested buyers. Some cosmic upgrades are done to the property in the interim, but no major renovation takes place.  

In this case, the micro refers to the fact that transactions happen so quickly. It is not uncommon for a micro flip to take place within a week when the property was initially identified as an investment opportunity.

Notably, it is a low-margin and high volume investment strategy. You can make a few thousand dollars on every real estate transaction. But you won’t see tens of thousands of dollars in profit as you would in a traditional house flip. With this strategy, your success depends on your ability to find such properties and connect them with an interested buyer.

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To know about the things you should be aware of when investing out of state, click here.  

What are the advantages and disadvantages of micro flipping?

Just like any other investment, there are many advantages and disadvantages of being a micro flipper. Keep reading till the end to get a better sense of whether micro flipping may be the right choice for your next investment venture.

Advantages –

The biggest advantage of micro flipping is that as compared to other investment strategies, this is a passive form of investment. While you need to work hard to find undervalued properties with motivated sellers and interested buyers, this work can be done from behind a computer. Here is your guide on how you can compete even in a hot market. And there is very little sweat equity that is poured into the home. In a few cases, micro flipping can be a little more than contract flipping where no work is done to the home at all.

Another advantage is the speed. Everything happens faster in micro flipping as compared to the traditional wholesaling. Here you need not drive around and look for properties that can be bought below the market value, no cold calling, and no knocking on doors. It is all about analyzing the data sets to find motivated sellers who are willing to make a move. Once you get a hang of it, you can achieve it in very little time.

Disadvantages –

The major disadvantage of micro flipping is the stiff competition. Here, your main competition for properties will not be individual investors. Instead, you will be tied up against micro flipping’s best players.

Such companies are at a major advantage over individuals because the major business model is based on the exact data sets that you will need to use for becoming a successful slipper. They have an existing stable of buyers and sellers from which they funnel leads.

However, another disadvantage is the profit margin of micro-flipping. It is a low-margin and high-volume investing strategy. You will not make as much money per transaction s with other forms of real estate investments. If real estate investment doesn’t interest you, it is worth looking at other ways to diversify your portfolio.

How to start your micro-flipping journey?

If micro flipping interests you and you think that it is right for you, then here are a few tips on how you can get started and will provide you good foundation knowledge of what successful micro flipping takes.

Investing in the right equipment –

Once you have a stable network of interested buyers, your next step is to find undervalued properties to buy. To do so, you need to access the market data. It is possible to get the details through public records data and MLS to find them on your own; many programs are available out there to help you identify distressed properties. You need to do n extensive research to find out which one works the best for you. However, if you are interested in stepping this route, one of those programs can be a worthwhile investment.

Networking –

To become a successful wholesaler, networking is a must for you. While you may think that the first step in micro flipping is to find properties, it is completely another way around. It will work out in your favor if you find a potential buyer first and then the property. In that case, you will not have to worry about the carrying costs. you can use the transactional funding to buy and sell the property the very same day.

Decide on your financial strategy and build a team of real estate –

It is important to figure out your finances and see if they are in place. Most people, who follow this real estate investment strategy, either use their hard money or transactional funding to find their purchases. There are advantages and disadvantages to each, but you need to decide which financial route you would like to take.

After you have figured out your financial strategy, you can connect with your lender for funding. It should be someone with extensive experience in wholesaling. If you don’t own a real estate license, you can work with San Antonio real estate agent who will help you with the contacts.

Also, check out houses for sale in San Antonio, TX, and San Antonio Condos for sale, here.

The bottom line –

Although “micro flipping” is a new term, real estate wholesaling has been around for a long time. If you are thinking of using wholesaling as a means to make money, use this guide to get started on your investment journey. With the right knowledge, you will have a better idea of whether micro-flipping will be the right investment strategy for you or not.

If you do not have your real estate license, partner with Reyes Signature Properties, top realtors in San Antonio, Texas.