Walnut Street Finance Blog

Micro Flipping - Here’s the Scoop

Posted by Walnut Street Finance Team on Nov 19, 2019 10:45:00 AM

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The term micro flipping has been popping up recently, and many real estate investors are asking what it is all about. Simply stated, micro flipping refers to buying and selling homes quickly using technology and data without doing any rehab improvements. It’s effectively wholesaling online.

iBuyers are real estate companies that buy and sell properties through technology. Companies like Zillow and Opendoor are a few examples of companies that have applied technology to real estate transactions. Using technology and data, individual real estate investors can buy properties and flip them immediately, just as large iBuyers do.

How Micro Flipping Works

By analyzing data and using new tools, micro flippers are identifying opportunities to buy below market price and flip to another buyer quickly. Speed is essential to micro flipping. It is designed to happen in just days from the point when you purchase a home or contract and sell it to a buyer. Generally, these aren’t homes that require extensive work. Micro flippers are not doing repairs. The time is spent on data analysis to find the properties to purchase and lining up buyers to sell the property.

The Difference Between Micro Flipping and Fix and Flip

Micro flipping is high volume, low margin real estate transactions. Micro flippers do not rehab houses. Fix and flippers purchase a property, add value by renovating, and then sell it on the market for a profit.

Data for Micro Flipping

What makes micro flipping possible is getting access to data on properties, data about the property owners, and data on buyers. This can be used to identify profitable investment and motivated sellers. Data is best when it is accurate and recently updated.

The large iBuyers have demonstrated that this flipping method can be profitable, and as technology and tools get better and more accessible to individual real estate investors, micro flipping will likely continue to grow in popularity among real estate investors of all sizes.

 

Topics: Real Estate Trends

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