What is Micro Flipping in Real Estate?

Many people have heard of house flipping, but micro flipping, its closest cousin, isn’t as well known. This easy and quick real estate investment strategy is criminally underrated, but it can be worth the modest investment. Micro-flipping happens when you simply buy a property at a low price with a hopefully bigger profit. The micro-flipping process can be more streamlined compared to traditional flips. Most importantly, in periods sometimes as short as a month, properties can reap an ROI. Without further ado, let’s dig into the basics of what a micro flip is and how to accomplish one.

Table of Contents

• What is Micro Flipping?
• How Does Micro House Flipping Work?
• Pros and Drawbacks of Micro-Level Flip VS. Traditional Flipping Strategies
• 3 Tips to Have a Successful Micro Flip
• Fund Micro Flipping Projects with Hard Money Loans

What is Micro Flipping?

Micro flipping is just that: real estate flipping that happens on a small, or micro, scale. The amount of effort you put into preparing the house for sale is also smaller. In many cases, your risk level is smaller too. Additionally, the time frame you’ll have this done and over by is, again, smaller. Microflipping can be a great option for investors searching for money on the side, or for funds that can be rolled into bigger investments. But, for those without investment capital on hand, obtaining hard money loans in Maryland is a great way to reach your real estate goals.

How Does Micro House Flipping Work?

With micro-flipping, people can buy and sell homes quickly with little or no revamping or building construction.

Because micro-flipping involves minimal refurnishing, you may make a modest profit. However, on the other side, you can save a lot of renovation money and time that could have gone down the drain in other real estate strategies. Some estimates suggest that flippers can earn $5,000 to $20,000 in profits.

Additionally, the work-to-profit ratio can be much larger. Even better, many micro-flippers flip homes in large quantities at once. Further helping to scale their potential profits.

Pros and Cons of Micro-Level Flips VS. Traditional Flipping Strategies

There is a time and place for both micro flipping and traditional house flipping. House flipping takes more time and gives you more money, while micro flipping does the opposite. Depending on your time constraints and earning goals, one or the other of these strategies might just be the ticket.

Pros of Being a Micro-flipper

Time is a top factor that sells people on micro flipping. House flips can be time-costly endeavors, taking up to a year or more to make a profit. Meanwhile, micro flips can take mere weeks to complete and churn out $5,000 or more per transaction.

Cons of Micro-flipped Projects

If you’re looking to make an enormous profit per flip, this option may not be what you’re looking for. After all, the amount of money you make is correlated to the amount of investment you funnel into earning it.  Because micro flips require micro-amounts of investment, you may make smaller returns from them. At the same time, these smaller gains can add up, piling further and further into a solid, hefty sum.

Pros of Traditional Flipping

Traditional flipping can garner you bigger oodles of cash than micro flips. In addition, you can attain these funds all at once, in one fell swoop.

Cons of Traditional Flip Experiences

Traditional flipping can be a longer, more intensive process than micro flipping. It can require more helping hands, more planning, more money invested, and more months of waiting for ROI. Due to this, traditional flippers will need to play the long game before they see the results.

3 Tips to Have a Successful Micro Flip

When you come into your project prepared, it can show you how to succeed in micro-flipping. So let’s take a look at the tips you should keep in mind when you flip:

1. Settle Your Budget: First, you can crunch numbers together to create your budget. Make sure that you run a fine comb through your finances to pinpoint your exact budget, ensuring that any surprise fees, service fees, and taxes can comfortably fit. Then, once you’ve completed the below step of researching properties, keep your eyes on the prize and stick to properties that strictly fall within your means.
2. Research Properties: After you’ve settled your budget, it’s essential to narrow down the properties you want reflected in your property and the marketable qualities you want. The basic factors to consider are your ideal size range, amenities, and location. In many cases, you may want to purchase a low-cost, low-risk property to ensure the best chances of making a profit from your sale. Finally, you can turn to resources such as social networks, associations, and software to whittle down properties that match what you are looking for in an investment.
3. Find a Loan to Fund Your Project: With relatively high-cost and high-stakes projects like micro flips, hard money loans can be an optimal way to handle the expenses. Hard money lenders can give you the funds you need to see these projects through till the end when they otherwise may be difficult to raise. Plus, hard money lenders have less stringent credit and financial requirements than traditional lenders. Due to this, people with little money, who may experience barriers to bank or similar institutional loans, may have an easier time obtaining a hard money loan.

Fund Micro Flipping Projects with Hard Money Loans

Micro-flipping is a great option for those who want to sell low-cost properties at comparably high returns. When you have your micro-flipping plans set in stone, the only thing left to do is find a hard money loan to fund your project.

Luckily, groups like us have years of experience in helping micro-flippers like you make their plans come to fruition. Our team has the connections and resources to be a valuable team member in your real estate investment journey. Call the hard money lenders at Maryland Hard Money Loans to put new properties under your portfolio belt.