Micro
Flipping Quick Profitable Investment In Real Estate Defined – Micro Flipping is made up
of two words “Micro” and “Flipping”
Micro – means quick or short span
Flipping – means selling
What is Micro Flipping in Real Estate – Micro Flipping is a new business concept in the real estate market and is gaining pace in the industry. It’s unlike the traditional wholesale real estate business.
Quick flipping is a tech-savvy digital form of short-term wholesale real estate operation. Needless to say “modern days form of real estate wholesaling”.
With business changing and the world getting digital, the marketplace is changing from traditional business values to the new modern methods. Also, the new challenges of lockdown and work-from-home culture have given birth to new forms of business strategies and technologies.
Why is it called “Micro” – The turnaround time of the transaction (buying-selling) takes place in a short period. The transaction period may be from few days to few weeks. The word micro is associated with its short transaction time.
How Micro Flipping in Real Estate Works – The quick flipping business works in fast-forward mode with few new tricks. The micro flippers use software to analyze data and find the properties that are below market price and require less renovation.
Unlike the traditional real estate method where both time and money were invested, this new real estate business method works on less investment and less turnaround time. Here time is money and money is saved time.
The largest players of quick invert are big corporate giants who pump huge money to buy desperate or undervalued sales from the market. The selected properties usually require little renovation or cosmetic upgrades and the complete sales cycle ends in a few days or weeks, thus churning profit. The profit margins are usually kept low as the entire model is based on several transactions in the shortest period.
The Flipping Model Works on 4 Basic Principles:
Finding Property: The basic principle lies in “detecting the undervalued properties”. The model works around trading in properties that are easy to rotate in a short period. Usually, it does not involve a very huge investment as the property selected is an undervalued or desperate deal.
Finding Buyers: Before purchasing the undervalued property, a search for a prospective buyer is initiated. As the property gets shortlisted, the search for its potential buyer starts, as TAT (turnaround time) is small in these transactions. The negotiation with the seller starts post shortlisting the buyer of the respective property. The basic essences of these transactions are how fast the buyers are searched for the selected property.
Seller Negotiations: Post shortlisting the property and finding the prospecting buyer, the negotiations are done with the seller to close the deal. Negotiation is done on two factors “Price” and “Time”. “Time” plays a major role in these deals because margin squeezes if the payment is in a short time duration.
Selling to Buyers: The last step is selling the property to a prospective buyer in a stipulated schedule at a negotiated price.
Micro Flipping vs Wholesaling vs Renting –
Micro Flipping is a short-term investment business practice that invests in properties that are easy to rotate in a sheer time. The margins played upon are limited and time-bound.
Wholesaling is a fairly long-term investment, where the property bought, is the most desperate deal of the market. But the physical state and condition of the property are not considered in these purchases. The profit margins are kept big and thus are the investments. These are not time bounded transactions.
Renting is subletting the property on lease or rent as a recurring or additional income. The property is not transacted in this method, the ownerships are not transferred. Renting gives fixed monthly cash flows. Rentals are held as long-term investments thus helping in cash flows, tax benefits, and property appreciation over some time.
Micro Flipping Pros –
1. The passive form of
investment
2. The turnaround time of
complete sales transaction is small
3. The amount of
investment is fairly low
4. No much efforts
required in uplifting property
5. The market exploration is huge, as can buy and sell the property at any place
Micro Flipping Cons –
1. Low-profit margins
2. Requires tech
competency
3. Tough competition as a
transaction has to be done in a short span
4. Income depends upon
the number of flips done
5. Need to pay tax on every flip
Conclusion – Micro Flipping Quick Profitable Investment In Real Estate is a low investment business that lets you explore the market and allows you to sell anywhere anytime. The quick profits can be minted in these transactions. Requires good software’ to work upon along with an effective database.
Fairly good knowledge of real estate and its competitors is required as real estate is the most profitable and most volatile product to deal with.
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very nicely explained. keep it up your good job👌
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