House flipping involves buying a house, fixing it up and re-selling it for a profit. Several TV reality shows follow professional house flippers as they buy below-market homes from distressed sellers, spruce up the place and sell it for a substantial profit. A flipper may have possession of a property for a period of months or even years before he is able to sell it for a profit, during which time he has to cover the costs of insurance, taxes, contractor work on the home, utilities and more. Finding investors for real estate flipping who understand the process can be challenging.
Check With Real Estate Agents
A good place to begin looking for investors interested in real estate flipping is with local real estate agents, who often work with investors for various projects. Thus, local agents may know investors who have worked on projects similar to yours. This form of networking may not always lead directly to a deal, but may open other doors that can provide the financing you need.
Online Classified Ads
Many real estate investors will place ads in newspapers or online classified ads with headlines such as "We Buy Houses." A web browser search for similar terms will turn up a variety of websites in your area for people who are looking to buy distressed properties, but, more importantly for you, are looking to invest in a good property deal. Additionally, you might consider posting ads announcing your need for investors. Of course, you'll want to protect your interests, so be sure to have your attorney review any paperwork for any investor deal before you sign.
Real Estate Investment Clubs
Check online for any real estate investment clubs in your area. Websites such as MeetUp, REIClub and National REIA are all good choices for finding local organizations that have regular meetings. Find a few meetings that you can attend and contact the group organizer for leads on members who might be interested in investing in flipping projects. When you attend a group meeting, stick around until after the meeting and outline your investor needs to a number of attendees, as this may help you find some new networking opportunities.
Friends and Family
Finding bank financing for real estate flipping can be difficult, so many flippers look to friends and family for financing. A private financier may be willing to put up the money to finance the flip in exchange for a portion of the profits, but that may mean adding the financier as a partner on the project, which would reduce the amount of control or profit that you'll receive after the sale. The investor might also ask for a fixed return on their investment that will yield a higher percentage of interest than they can get from a CD or savings account. In this case, you'll be adding interest costs on top of the other expenses that you'll be facing during the time that you hold the property.
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