Have you heard of the new real estate trend called micro flipping?
Savvy real estate investors looking to stay ahead and capitalize on new technologies and real estate investment strategies are turning to this profitable niche.
In this article, we are going to answer the following questions:
- What is micro flipping?
- How does it work?
- Is it better than traditional house flipping?
- How much money can real estate investors earn from micro flipping?
- What kind of software do you need to get started?
Micro flipping real estate is an exciting venture for the right investor. With the rise of real estate technology, buying investment property can be done in entirely new ways, making the jobs of real estate investors both easier and more lucrative.
What Is Micro Flipping?
Micro flipping is essentially the online wholesaling of real estate. While this concept might be confusing to investors who are used to making slow-moving, traditional deals in person, micro flipping real estate is fast, virtual, and only requires a few hours of energy.
Related: Software for Remote Real Estate Investing
Currently, the biggest players in this space are called iBuyers. These are companies that purchase homes online either at or slightly below market value. The types of homes iBuyers target are in need of little to no renovation, meaning that they can quickly sell them for a small profit margin without putting in any physical work. The timeline for these transactions is typically about a few days to a week.
The reason iBuyers are able to buy and sell homes so quickly is because they have access to important real estate data. By knowing who is ready to buy and sell and having the means to connect with those people, individual real estate investors can also effectively succeed in micro flipping. The real estate investment software is out there, and it is available to anyone who wants to make the leap into this space.
How to Get Started: The Process
Here’s what you need to know to get started with micro flipping in real estate.
Finding Buyers
Micro flipping requires a very small time frame, hence the term “micro.” This means that before an investor has possession of a property, they must already have potential buyers lined up.
While this might seem intimidating, it is not difficult to find people who are looking to buy a home. Much the way real estate agents might search for home buyers, investors involved in micro flipping can find individuals to sell to if they have access to property data.
Learn more about how top agents are doing it: Finding Buyer Leads: 16 Ways You Need to Try
Finding Sellers
Once a real estate investor has buyers who are ready to make a purchase, they must find a suitable property to make a sale. This is where finding sellers using homeowner data comes into play.
The key is to use homeowner data to find motivated sellers. These are individuals who might be on the verge of foreclosure or need to move quickly. By accessing information about the individuals who own homes, you can pinpoint sellers who would be most willing to sell quickly for less than market value. This kind of deal will leave you with enough room for a profit margin when you sell.
Closing the Deal
The emphasis in micro flipping is on research and real estate data. This involves conducting real estate market analysis and possessing an understanding of the values of individual properties, as well as the motivations of people looking to buy and sell their homes.
Related: Real Estate Market Analysis: 3 Easy-to-Follow Steps
Deals in micro flipping close typically within less than a week, with the real estate investor only pouring a few hours of energy into the transactions. Everything is done remotely on an extremely tight turnaround. The fast transactions are a direct result of prior planning, and they are necessary in order for the investor to make a profit.
Micro Flipping vs Fixing and Flipping Real Estate
You might be wondering if this is riskier than a fix and flip. The truth is, it depends. If you have the property data and plan correctly, micro flipping could be less of a risk than taking on a fix and flip property.
Fix and flips require extensive renovations and longer time frames, and both of these factors introduce the possibility of the strategy not going according to plans. If there are unforeseen expenses in the renovation process, a fix and flip can quickly turn from profitable to a money pit. Micro flipping, however, should go smoothly if you have multiple buyers lined up before purchasing.
How Much Money Can You Earn with Micro Flipping?
The greatest draw for real estate investors interested in micro flipping is the return on investment. While a good fix and flip might bring you $50,000 or more, it could take a year to make that money.
Micro flipping only requires a few hours of work and usually no more than a week’s time, and investors can expect to make $5,000- $10,000 or more per transaction. It is easy to see how investors who have mastered this strategy have made huge profits. Successfully pulling off just one micro flip per month has the potential to replace an investor’s day job, and micro flipping full time can be extremely lucrative.
What Kind of Real Estate Software Do You Need?
The most important aspect of micro flipping is the real estate technology involved. Without real estate investment software, investors have no way of accessing homeowner data and setting up transactions.
To get a hold of homeowners looking to buy and sell, you must learn how to find out who owns a house. This can be done through Mashvisor’s Mashboard. We have a database full of information that you can search for by criteria such as city, state, property types, sales date, and year built. You can also use Mashboard to qualify buyer leads. The “likelihood to buy” rating is auto-generated by our software using predictive analytics to give you a better chance of finding motivated buyers.
After finding prospects in our system, you can pull up their profiles, which contain more useful information. This includes their contact information, so you can reach out to them about selling their home or making a purchase.
Buying investment property is no longer limited to real estate investors who want to rent or fix and flip. Thanks to online data and technology, real estate investing does not necessarily have to include tying up money for long periods of time, performing renovations, or managing a rental property.
If you think micro flipping is the best real estate investment strategy for you, learn more about accessing homeowner data via Mashboard.