Since we have worked together before, I would like to share with you an investing process that is unfamiliar to most people. Most real estate investors are familiar with Flips and Fixer-Uppers. However, the new process that I am referring to is a hybrid of Flips and Fixer-Uppers. I call this technique a Flixer.
By definition, a Flixer is a property that you buy low, sell high and make 60-75% of the potential Fixer-Upper profit by doing one of the following:
1. Act like you are going to do the fixer-up work, but then sell the opportunity to someone else.
2. Begin the fix-up work, but then sell the opportunity to someone else who will finish the work for a discount on the finished price.
3. Start and stop the fix-up work anywhere during the process to sell for a discount on the finished price.
The Flixer technique is all about finding properties, identifying their best uses, exposing others to those best uses through great marketing, and profiting by selling the property to the next owner.
As we talk about the potential uses for property, the main question that always comes up is, “What is the property’s highest and best use?” Most people are not aware of the many uses that are available in the property.
A recent poll conducted by Mike Watson Investments revealed that the average investor guesses there are 5-7 different uses for a property. However, research shows that most cities and counties offer well over 100 different uses for properties.
These findings emphasize an important point: people are either unwilling or unable to be creative when it comes to optimum property uses. Therefore, being able to see properties for what they can be instead of what they are right now is a very lucrative skill to posses.
Flixers are great because you can make profits in the short term. The only time required for ownership is the time necessary to market the property and sell it to the next owner. Flixers are also good for getting the property under contract and assigning it during the contract time to another owner for an assignment fee. This allows you to profit without property ownership. You can then do more deals with fewer resources because you don’t have to close on some of the properties.
Happy Investing,
Kendall E. Matthews, CRMC
Phoenix, Arizona Investment Real Estate