Are you Micro-Flipping yet? If you’re not, your game plan could be in trouble…
Just as ETrade changed the world of stock marketing investing, micro-flipping is changing the dynamics of the real estate industry and what works in investing. Most probably can’t imagine having to go into a brokerage company every time they wanted to find or trade a stock. Now the new technology tools driving micro-flipping are changing the status quo and who the new winners and extinct will be in the property business.
Keep reading for the where, when, how, and why of micro-flipping…
The DNA of the Market is Changing
Soon, realtors aren’t going to stand a chance showing up with a listing agreement if they don’t also have a cash offer in hand. It’s become too easy for house sellers to find buyers online. Consumers no longer want to be tied into long listing contracts, with no guarantees, and high commissions. They want instant results.
Achieving this type of market efficiency is made possible through the “deep” data scoring via the pre-MLS software, PiN. Tap Here To Learn More About PiN.
Similarly, if not already, real estate investors are going to find old-school ways of doing business getting very cramped and requiring more work for less profit.
The National Association of Realtors is second place for the organization spending the most money lobbying in Washington DC. NAR spends tens of millions of dollars to ensure their unnecessarily high commissions and borderline monopoly is protected by lobbying in Washington. Their fat commissions have been under threat as everything moves online and data and transparency is the new norm. Fewer buyers and sellers than ever seem to be able to justify spending 3 – 6% or more on a Realtor
The boom in big fund backed iBuyers has been one of their biggest threats. These tech-based companies with access to unlimited capital are micro-flipping in more and more markets. OpenDoor alone recently raised another $400M (bringing the total raised to nearly a billion) to establish its dominance in this market and buy up market share. Real estate brokerage Redfin has even partnered with Opendoor to roll out the service to their own prospects and customers. More notably Opendoor has partnered with home builder Lennar for what they call one simple seamless transaction to trade up out of your old home (by selling to OpenDoor) and getting a brand new smart home from Lennar.
What is Micro-Flipping?
To sum it up, micro-flipping is fast, frictionless property flipping that is only possible with access to certain data sets.
The ‘micro’ in micro-flipping refers to the speed at which properties can be resold for a profit. A well organized micro- flipper will already have buyers lined up so that they are effectively pre-sold when you contract new ones. Ideally, you are in, out, and paid less than a week and with less than a handful of hours invested in the deal.
Micro-flipping is a multi-billion dollar industry, which is really only being mastered by big funds behind these iBuyers for now. Yet, it is a strategy that individual investors and small investment companies can use too if they have the right tools. It’s worth noting that ETrade, which brought stocks online now has some $65B in assets. We’ll see more giants like this in real estate too.
Micro-flipping means buying or getting properties under contract and flipping them for a profit almost immediately. It’s effectively wholesaling online, that can be done from your laptop or phone, right from your recliner at home. Almost just like trading a stock.
Micro-Flipping Vs. Wholesaling Or Rehabbing Houses
Micro-flipping is the high volume, low margin, and low-risk real estate investment strategy. It is just as much an investment style as it is a state of mind.
Traditional real estate wholesaling is very fragmented, labor-intensive, and requires a lot of time hustling and sweating. At least in comparison to this new option. Wholesaling means scavenging and searching for deals and can be incredibly inconsistent and inefficient.
Micro-flippers don’t rehab houses. You aren’t doing major repairs or demo or finding and managing teams of contractors. Those are the highest risk areas for investors, and the biggest drags ongoing from finding deals to cashing in on them. Some iBuyers like Zillow may do basic cosmetic improvements, but you don’t have to do any at all.
The Advantages Of Micro-Flipping Real Estate
Instead of searching, driving streets, knocking on doors, running expensive marketing campaigns, and mailing to find deals, micro-flippers simply need to sort the data that is already there. (Like a stock investor of today simply sorts though the stocks that are available inside their E-Trade)
What makes micro-flipping possible is for the first time you can now get access to data on every property in America. Not only can you see the facts about the property, but also the people data. You can quickly identify profitable investment opportunities and prospective motivated sellers who are financially distressed or are going through some major life event that is motivating them to sell at the right price.
We’re not just talking about old school mailing lists either. This is actionable data with phone numbers and social media profiles so that you can text them and message them online and cut deals anywhere in the country from wherever you are. It’s like the on-demand service of Netflix versus still trying to use DVDs.
So, it’s faster, lower risk, and easier than any real estate investing strategy you’ve seen before.
How Much Money Can You Make By Micro- Flipping Property?
How much you insist on making and where you choose to apply this strategy may influence your deal flow and net earnings. Being conservative estimate that you can make $5,000 to $20,000 per deal simply by flipping the contract. The most attractive part about micro-flipping is often you only have several hours invested in each deal. In many cases, Micro-Flippers make over $2,000 an hour.
We recently spoke with a rehabber, Ray Richie who changed his strategy to micro-flipping after suffering an injury and he is quoted as saying:
“It’s not very hard. I spend a few hours a day micro-flipping. I am planning on doing 12 more micro-flips over the next 12 months”
Ray is 81 years old and has no problems navigating the software he uses to make this possible.
Is Micro-Flipping Legal?
Micro-flipping is 100% legal in at least 49 US states and requires a little finessing in 1.
You can close on your property using any type of funding you choose, including private money, transactional funding, hard money, and cash. Or simply flip the contract. Note that Illinois is the one state that recently created new laws restricting contract flipping. It has not been confirmed, however, it makes sense that the money NAR is spending in Washington may have played a role.
Otherwise, it is completely legal. Obviously, it is always wise to speak with your own real estate attorney to make sure they have you protected for the way you are doing it.
What About These Giant iBuyers?
How can regular people and small to medium-sized investors compete in this market against giant iBuyers and their hundreds of millions of dollars in buying power?
The awareness of this method of selling for homeowners that are coming out of all this marketing spend and PR is great for individual investors. They are doing the heavy lifting for you.
These iBuyers may be big, but they are slow-moving too, and they aren’t buying everything. They are still mostly concentrated in certain cities. They have very specific buying criteria. The latest statistics show that most buyers are turning down their offers.
This is a golden moment, where you can benefit from the buzz, move faster, make better offers, and grab all the deals they are missing out on.
You may even ultimately find the big iBuyers some of your best customers for reselling your deals.
The Keys To Successful Micro-Flipping
- Getting access to the data
- Contacting the sellers
- Shifting them to the plentiful pool of buyers out there right now
- Keeping up your momentum
What Software Do I Need To Micro-Flip?
What is great about micro-flipping is you only need one login to make it happen. The first decision you need to make is what software company do I want to access data from.
Here are some things to look into as you make your choice
- Updated DAILY. Speed is everything with micro-flipping. You will want to find software that provides data that is updated daily. Most software is updated monthly or weekly.
- All Properties Are Included: You need to be able to search and sort through all 137 million property records in the USA.
- Filters: You need advanced search filters that allow you to find the properties with sellers that are most likely to sell at a steep discount.
- Contact data: You can’t close the deal if you can’t find the owner. So ensure whatever software you use has the ability to skip-trace to provide you with email and phone numbers. NOTE* You’ll want to validate the price of skip-tracking. Some software that claims to have skip-tracing charge you big fees.
- Customer support & training: Whatever platform you use, I suggest testing out how good their support team is.
- Property flippers and landlords: In addition to finding the seller you will need to find the buyer to ensure your platform of choice comes complete with access to buyers.
- A way to stay organized: You will be sifting through a lot of property records so having a way to manage each deal is important. (Excel will not cut it.)
- Mobile access: Ensuring your data can be accessed through an app.
- How often is the software updated: Ensuring your data is updated daily is one part of it, but how often is the company making updates and improvements to the platform itself is just as important. You are looking for a company that makes updates to its software every month.
- What are the additional perks of the software? It is one thing to have the buyer and seller data in one spot but what about things like training, funding, and other software platforms?
- Ensuring you know what you can do with the data. Can you export the data? Do they have plugins so data can flow into other software you use? This will be important as you grow your company.
The best option is PiN software offered by ConnectedInvestors.com – You can call their team at 888-204-7501 to set up a demo. They have monthly and yearly price points for the software.
PiN meets all the requirements above. Once you are in you can filter for numerous parameters like equity, property value, type of distress, and local house flipping activity. Then set up instant notifications for alerts to brand new deals. You can also use it to find active rehabbers and landlords in those neighborhoods and flip those properties to them.
One of the newest features being added to the system gives you your exact next steps in the process so you never get stuck, and can start micro-flipping, even if you are new to real estate.
Micro-Flipping Real Estate The Ultimate Side Hustle.
When looking for a way to make money on the “side” it is important to ensure whatever opportunity you are looking at is.
- Proven: There is no “Side-Hustle” more proven than real estate. 90% of all millionaires made their millions in real estate.
- Locations: Freedom of location is the “New Rich.” Until micro-flipping became a reality real estate required a lot of hands-on intervention. Not anymore. Now you can have the most proven wealth-building strategy and not be tied down to anyone specific location or market.
- Low startup cost: When looking into any new venture this is always an important factor. Many people start a micro-flipping business with just a few thousand dollars.
- Easy to sell: The last thing you want to do is start a business, buy up a bunch of inventory, and get stuck with it. Or work your whole life to build a business that can never be sold.
To learn more about PiN, Tap Here.