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How to Flip a Foreclosure Home for Profit

By: Alexis McGee | Written: February 25, 2013

Flipping foreclosure homes is back and it’s big business. Profit-minded entrepreneurs are jumping into “flipping” – buying houses at fire-sale prices and selling for a big profit, after they make improvements on the property.

Flipping foreclosure homes are up 25% from last year and is exploding nationwide. We expect to see even higher sales volume and bigger profit margins this year- as the housing market rebound continues to heat up. (Learn More About Foreclosure Home Flipping Here.)

Flipping Foreclosure Homes

During the last real estate boom, flippers used mortgages to finance deals. Now, a new breed of all-cash foreclosure flippers is dominating the  foreclosure flipping market.

Currently, there is a tremendous amount of private capital sitting on the sidelines, waiting to be placed. Smart house flippers are tapping into that equity market, offering high returns to their cash investors, and locking in $30,000 plus paydays for themselves on every flip.

Smart flippers are buying fire-sale distressed foreclosure homes, and quickly turning these deals into double-digit profits after they have repaired and sold the homes to first-time homebuyers or rental property investors.

Check out the results for yourself here: Top 10 Markets to Flip Foreclosure Homes

Buying, renovating, and selling an investment property is a sure-fire way to get rich quick, if you know where to begin.

A smart and relatively safe way to start is by flipping pre-foreclosure homes. Here’s why… 

Pre-foreclosure is when the property still belongs to the homeowner, but the lender has initiated foreclosure procedures because payments have not been made and the loan is considered to be in default.

This is a critical time for the homeowner and it represents a tremendous opportunity for your investing business. With the right knowledge, you can capitalize on some of the most amazing real estate bargains in your own backyard with very little money, and no credit needed.

Not convinced?

Here’s a few reasons why pre-foreclosure home flipping offers unlimited profits in 2013 and beyond:

  • A pre-foreclosure owner is often very motivated to sell, get the lender off his back and a fresh start with less debt. It’s not uncommon to buy a house in good condition that is in pre-foreclosure and create a 30-50% equity spread.
  • Lenders prefer to liquidate a bad loan rather than take a property back. Therefore, you can request that a lender discount what is owed on its payoff (also known as a “short sale”). This strategy can create a large equity spread on a house that is over indebted with loans. Once you become familiar with the issues that cause lenders to discount, and which lenders are discounting in your area, larger discounts can be achieved.
  • Buying a house in pre-foreclosure allows you to take over the existing financing “subject to”. You don’t need to qualify for a loan. You can take title to the property, begin making payments on the existing mortgage(s), and still get all the tax advantages, appreciation, depreciation without any of the risk of being personally liable for the mortgage and the property.
  • Pre-foreclosures are a very well defined niche market, which allows you to get deals completed and closed quickly, anywhere from 14-90 days from start to finish.
  • Save yourself the grief, time and money of going to the auctions and beat your competition to the best deals by striking a pre-foreclosure deal with the owner before he/she lists it for sale, or let’s it go to auction.
  • You get a chance to improve the livelihood of the homeowner in default who is down on his or her luck, with cash in their pockets and a fresh start.

There are several ways to make money flipping foreclosure homes for profit (pre-foreclosure, short sale, auction or after foreclosure as a banked owned REO). But now you can see why pre-foreclosure home flipping is my preferred way to make huge profits in 2013 and beyond.

If you would like to take advantage of the opportunities to make money flipping foreclosure homes in your backyard, without using any of your own cash or credit, please join me in my Free, Live New Foreclosure Investor Webinar “Foreclosure Investing: Make Fast Profits Now“.

Register Here, Mark Your Calendar for 6pm Pacific, 9pm Eastern, February 27th.  Join Early and Stay Late. I have a lot of new information to share that I don’t want you to miss. Talk to you then!

Read More about Flipping Foreclosure Homes:

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