January 2, 2020
A new real estate trend has been growing in popularity in the United States over the last few years and it may be one you’ve never heard of. Micro flipping is a new real estate business model similar to flipping houses, but with some major differences. So what is micro flipping? What is involved? Is it profitable? Let’s take a quick look at what micro flipping is, how it differs from traditional flipping, and how to make it a profitable endeavor.
Micro Flipping vs. Traditional Flipping
Traditional house flipping is a business model where investors purchase a property below market value and renovate or rehab the property. Once the renovations are complete the property is sold for a profit, because the renovation has increased the property value. Micro flipping, on the other hand, is when a property is purchased below market value for some reason or another and is turned around and sold without any renovations. These properties are not in need of significant repair like a regular flip property, they simply were sold under value and resold for a profit.
How to Be Successful
The key to micro flipping is having access to all of the data necessary to make a good purchase, as well as having buyers lined up. Micro flipping is most successful when you have a close eye on the market data and can see when a property is undervalued. Maybe the seller is in a bind and has to sell quickly. Or maybe there is a discrepancy with their data causing the property to be undervalued. Micro flippers generally have a close eye on the market as well as potential buyers already lined up. The key with the micro flip is to unload the property almost immediately after purchasing it, and with no renovations necessary.
Because a micro flip, just like a traditional flip, is a unique type of transaction, it will require a unique type of funding. Hard money loans are a great option for micro flips because they allow quick access to cash with a shorter term on the loan. Because many micro flips take place in under a week, a traditional loan would be a waste of time and money. Hard money loans allow for quicker transitions and higher profit margins.
Your Hard Money Lender for Maryland Micro Flipping
Micro flipping is changing the landscape for flippers, making it easier to make money with less time and energy invested in costly renovations. Funding is an essential part of a successful flip, and us at Maryland Private Mortgage can help you get the funding you need to be successful. We are a hard money lender in MD and we have years of experience with hard money loans. To discuss your funding options, give us a call today!
The Maryland Private Mortgage Lending Team