The premise is simple in theory. Buy low, and then resell the property to an end buyer: either another investor, or an owner occupant for more than you paid.

Buy Low Sell High. "Flipping" Properties for Profit This is the technique that most people are familiar with. It is the buy low - sell high strategy. It has a lot of names. Some people refer to this as "Flipping " or "Wholesaling and Retailing", " Fixer-uppers", "Junkers." ,and "Ugly houses." The premise is simple in theory. Buy low, and then resell the property to an end buyer: either another investor, or an owner occupant for more than you paid (after adding back in all your costs to own the property). The properties may or may not need work to resell. There are several tracks that you can run on with this strategy. Finding the type of deals that work for you, in your given situation, is critical. What I mean by that is you better not be doing a major fixer-upper that needs a ton of work if you need to turn it in 30 days to a retail homebuyer, unless you know what you are doing. In the beginning, stick to properties that may need only some paint and carpet, and a little yard work. Legging into projects in the beginning is critical to your success as a new investor. It takes time to assemble all the players on your team. Take furnace guys, for instance. I recently had to replace a furnace, and my normal subcontractor had just retired, so I needed a new guy. I had my main contractor call, and get a few bids. They ranged from $1,200- $1,600 for that particular unit installed. I knew I should only pay a third that much, so I kept calling around and found a guy that did a lot of new construction. Once he realized it wasn’t a one-time job, and that he would get my maintenance calls as well, a bid came in for $600. Right where I wanted it. These types of relationships take a little time to find, and develop. They don’t take years, but you don’t want to go into a project paying retail for everything. Know what materials should cost.

Another great source for materials is your local Home Depot, or other discount lumberyard. Go down to the store. Shake a few hands. Get catalogs of everything they sell in the store. Spend a little time with the catalog so you know what things cost, and how to call things by their correct name. You’ll earn the respect of your contractors when they think you know what you are talking about. You can also set up an account for materials.
What you want to do is to create a template of the type of repairs you do, and the materials you  want to use. Remodeling does not have to cost a ton of money. You don’t need imported Italian tile to make a bathroom floor look good. By becoming educated to material costs etc. when your contractor says you need to replace a sink or toilet, you know exactly what your materials should cost. You should be able to do a complete bathroom - tub shower, toilet, vanity, sink, flooring etc…. for $500 in materials plus some labor.

Blend Color Schemes Choose a color pallet so that your paint, carpet, cabinets etc. all blend in the same color tones. Many new investors underestimate how important this can be. A potential buyer can walk into a room, and it may have a cool-tone carpet with a warm-tone paint color. When this happened something  In a subtle way, something just doesn’t feel right, and you lose the sale. If you have no idea what I am talking about then get Informed don’t underestimate the importance of this “You’ll earn the respect of your contractors when they think you know what you are talking about.  Talk to a professional decorator. It is real obvious, when you get the hang of it. You can see the builders that are blind to this compared to the builders that coordinate color schemes. It doesn’t cost any more, and will actually make you money when you factor in how much faster you will sell your house. For the guys reading this talk to your wife or girlfriend she will know exactly what I am talking about.

Junk Doesn’t Sell.
Just remember that when you are doing remodeling, junk doesn’t sell. People like to buy pretty cute houses. I always replace carpet and paint at the very minimum. It’s cheap and it gives you a lot of bang for your buck. Carpet with pad installed should not run you more then $10-$12 a yard.

Questions to Ask Yourself Before You Buy.
The first thing you should do is ask yourself: “Who am I going to sell this property to?”. Hopefully, you have answered that question BEFORE you wrote the offer, or at least by the time you got it accepted. Are you going to wholesale it to another investor, or are you going to retail it to a retail buyer? Do I wholesale for quick cash? The answer to this first question will tell you what track you will need to run on. For instance, if you are planning to wholesale the property, is their enough profit margin in the deal so an investor can make 15-25% profit? If there isn’t, you may not find any buyers. You need to consider the profit margin for the current market you are in. In a hotter market, you may be able to offer it for closer to its retail value, and still sell it verses a really slow market. A 25% profit may not be enough. This will fluctuate by area. When wholesaling property, less is more. The first thing I do is a trash out. I have made close to $30,000 on a deal just by hauling out the trash. It consistently makes $10,000 or more on an entry-level house. Of all the things people do to improve a property, the first impression counts the most. Haul out all the trash and do a clean up on the yard. It is money well spent. After I complete this, I then re-determine what I want to do with the property. Wholesaling is by far the easiest to do.

To attract wholesale Buyers you may want to run some ads like:

FIXER UPPER Cash!
30K under market.
123 Cherry Lane
Phone 123-456-7890
Or
STEAL MY HOUSE
Fixer, First 50K takes it.
123 Cherry Lane
Phone 123-456-7890

I wholesale property when I want to turn it fast for a quick $2-$10K profit. Most wholesale buyers are cash buyers who are looking for properties they can fix up and retail. I know a lot of investors who specialize in this. They may assign their purchase contracts for a fee, and move on to the next deal without ever doing any work. This is a great strategy if you are good at finding deals. Be weary of investors that have to go through the conventional financing process. You could end up eating up all your profit in carrying costs. Is it better to use retailing for maximum profit? Retailing for the maximum value is by far the most popular strategy. Even though it offers the greatest profit potential, it also carries with it the greatest risk for new investors. I have seen, time and time again. New investors often spend way too much money doing foolish improvements on a property that really doesn’t net them any more cash at the closing table.

What Improvements Matter Most? This is a good question, and I submit to you the answer is different for different markets. What you want is, to do the things that will cost the least, and yield the most. Rule #1 is to realize that you are doing this to make money and not necessarily live in it yourself. If it ain’t broke, don’t fix it. What I mean is don’t spend time remodeling the inside of an out-building if it’s painted the wrong color, and needs a workbench. The condition of an out-building will have little if any value. So what do you do? “New Investors often spend way too much money doing foolish improvements on a property that really doesn’t net them any more cash at the closing table.”

My suggestions follow :
When someone pulls up to the house, they have to want to come in. You can have a palace inside, but you have to get them to want to come in and see it. People judge a property on its attractiveness by its curb appeal. Do NOT underestimate the power of this. If you are on a limited budget, make it look good outside first. Fix-Up for the Woman in the House The next thing to remember is that "The women buy the house". I know this may sound sexist, but it’s true. If the wife hates the bathroom because the tub is discolored and the toilet seat is cracked, you won’t be selling it to that couple anytime soon (Even if the husband loves the outbuilding). Always put new toilets in for obvious reasons. After the property is free of all trash, yucky carpets etc., and the outside looks good, then make sure all the mechanicals are working properly. Replace or upgrade if necessary.

Focus on the outside curb appeal first:

a. Trash out the yard; Power wash the structure
b. Trim all shrubs; Green up the lawns.
c. Paint the exterior trim and basecoat.
d. Replace screens and do other cosmetic fixes.
e. Repair the roof.
f. Add house lettering, new light fixtures and a mailbox.
g. Install a decorative front door
h. Plant new shrubs, flowers, fresh bark, etc. (Within reason)

For the final details check all of the following:
A. Plumbing
B. Electrical
C. Heating / AC (Don’t forget to check the water heater. They often go out if the water was shut off, and the power was still on.)
D. Kitchens and Bathrooms
1) Make sure they are clean and sanitary.
2) Replace Toilets
3) Replace tubs if necessary and install a door enclosure.
4) Replace fixtures, etc.
5) Paint and change flooring or counter tops.
E. Repaint interior where needed.
F. Update fixtures.
G. New floor coverings, or clean the existing ones.
H. Change electrical switch plates, outlets, heat vents, mini blinds.

The little details make a big difference, and don’t cost much. This is by no means a complete list, but this can help you get started on your repairs. Repairs like this do not  have to take a lot of effort on your side. When I make offers on properties for all cash "flip deals", this is how I go about it. I usually make All Cash, or All Cash and a Seller carry back. All Cash Offers – 3 day Inspection Contingency Once I have tied a property up to purchase, I always have a 3-day inspection period. I typically make cash offers that close quickly, using private money. Sellers love these kinds of offers, and I have no contingencies to close except for a 3-day inspection. It is within these 3 days that I determine if I even want to buy the property.
I cannot emphasize this enough! Kitchens and bathrooms make or break a sale every time. If appliances are old and out-dated, replace them. If cabinets are not clean, scrub and paint them. I have seen people not do things because of cost. The house sit for months. The extra interest cost alone would have more than paid for the improvements.
Take the Time to Investigate the property. A lot of times I don’t even look at a property to buy until I get an accepted offer. This saves time, so I am not looking at properties I don’t want to buy. Sometimes I make 40 offers, that get 8 counter offers, and of those 8, I counter back, and get maybe 2 or 3 accepted. That way, I only have to look at those 2 or 3 properties. Make Multiple Offers
I then determine what the after-repaired value will be. I try to be realistic here. It is easy to put in some blue sky, especially when you need a deal. But you need to remember: you make your money when you buy. If you buy a property right, you can always resell it for a profit. You Make Your Money When You Buy! Many investors don’t realize this. They think they make it when they sell, and will pay too much for a property just because they want a deal. Figure Your Costs It is important to take a few minutes, and compute realistic repair and improvement costs, along with your profit potential. I urge you to be realistic, and pad your costs by a few thousand dollars. Also, make sure you factor in your holding time, and buying and selling costs, along with any money cost you might have in doing the deal. Write it down. Don’t guess, and don’t estimate in your head.
However, as you get better at buying properties, you will be able to walk through a property and estimate repairs within a few thousand dollars, in a matter of minutes. If you have a big enough profit built into the deal, it won’t matter if you are off a bit, or you have some unexpected expenses. Always Know Your Exit(s) Before Your Entrance Violate this rule, and you will pay for it. What I mean is that, if your only exit strategy is to "Retail" for all cash, and you only have a $10,000 profit built-in, I can almost guarantee it that you will not be in this business too long. One of the hardest things to do over and over is to have to retail property for all cash, because you failed to structure other exit strategies. It’s not to say it can’t be done. Many investors do extremely well with this “Allot of times I don’t even look at a property to buy until I get an accepted offer. This saves time.” Make Offers Get a Good Deal Make a Realistic List Have a lot of Options technique. They have taken time to develop, or implement systems for getting properties bought, remodeled and sold in a timely fashion. Build in "Terms" on Exit Strategies When you build some flexibility into a deal, like paying the Buyers closing costs, or carrying a second mortgage for 10-20%, and you can still make a decent profit, you won’t get caught sitting on property you can’t sell. The more flexible you are on "terms", the more options there are that will be available to you. The easier it will be to sell. You won’t want to take back seconds etc. on every deal, because you will be giving away hard-earned profit for no reason. If you have done your job, and made the property nice, you will have people competing to buy them The approach you take wholesaling, and retailing will be determined by the volume of deals you are doing, the amount of equity you have and whether you are doing real estate investing full, or part-time. One of the biggest deciding factors on your exit strategy will be the type of financing you agreed to in the purchase. Do you have to pay off your underlying loan fast (6 months or less)? Or do you have long term financing? Do you make payments, or is interest accruing until the property is resold? Can you "Wrap it", "Lease-option it", "Seller finance", or "Carry a contract"? All of these are options and tools available to you as a creative investor. Knowing and learning when and how to apply these strategies, and others will make you a ton of money over time. Lots of Options Make Quick Sales