It’s a common misconception that you have to “fix up” houses in order to sell them for a profit, but nothing could be further from the truth. Many PIG members have a made a pretty penny (over a million dollars in a year!) from flipping ugly houses to other investors, also known as “wholesaling.” The investor spends their time and money making it rental or retail-ready, while the wholesaler spends their time marketing for the next deal (and cashing BIG checks.)
One important ingredient to becoming a successful wholesaler (as compared to one who sits on the sidelines talking about “one day” doing it) is the ability to eliminate emotion from the decision to put a home under contract. To make money on ugly houses, you have to look solely at the numbers, to determine whether a profit can be made for you (or your end buyer). New investors will oftentimes walk into a stinky, trash-filled, rat-infested house and turn around and walk right back out. They mistakenly allow their 5 senses to determine the deal’s value, rather than the dollars and cents.
A while back I received a short sale lead (pictured) from another investor that was an absolute mess inside. Most of the windows had been broken, virtually everything needed to be repaired or replaced, and the home was full of trash (and had the smell to prove it). While most investors would turn up their nose at the opportunity…I smelled money, and decided to negotiate an aggressive price with the short sale lender.
The lender was owed over $80,000, and yet they settled with me to purchase the home for just $14,500 BECAUSE it was in such poor condition. Unfortunately, even at $14,500 the numbers DID NOT work for me as a renovation project because it was in a high-crime neighborhood that didn’t lend to a lot of new home purchases. HOWEVER, it was a great RENTAL area, and there’s always another investor who will find treasure in someone else’s trash.
So, we listed this property on the local MLS, and found an investor-buyer who was willing to $24,500 cash, and close quickly. I purchased this ugly house in the morning, and turned around just a few hours later and resold it to the end-buyer for a $10,000 PROFIT without repairing a single thing. Now that’s a good days work!
If you want to learn more about how you can become a high-octane wholesaler, and make money flipping houses you don’t own, you can click here to get a copy of our “Six Figures with Your Signature” wholesaling course for just $47! Or, become a member of the Professional Investors Guild and get your copy for FREE!
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