microflipping
With microflipping, you don’t focus on distressed properties and you don’t deal with fixer-uppers. Instead, you browse property listings, check the numbers, and find below-market deals. You would then acquire the property and immediately resell it at a marginally higher price.
Microflipping has slim profit margins. However, you can also scale up the strategy over time to include a larger number of households. Over time, you can make big money by adding small profits.
Advantages and Disadvantages of Microflipping
Microflipping involves less labor than flipping fixer-uppers. It also removes many of the risks associated with buying status quo and/or “looking down” distressed assets.
However, there are two main downsides to consider, and they are related. The success of microflipping depends entirely on applying your insight correctly. You’ll need a deep, detailed knowledge of the local real estate market and a strong aptitude for data-crunching. Second, microflipping relies on the right side of a thin margin. Things need to be arranged exactly right for the transaction to work in your favor.
Get started in six steps
The first thing you will need to do is identify your strategy. Most successful house-flippers specialize in one of the three main methods described above. They stay in their comfort zone, building up knowledge over time that helps them minimize risk and maximize profit potential.
Most beginners feel most comfortable with the distressed property or fixer-upper strategy. Over time, you’ll gain valuable insight into local market conditions. When you get to this point, you can move on to microflipping if you don’t feel comfortable with it right away.
Regardless of which approach you use, the following general steps apply:
