Flip Real Estate
The fastest way to make quick money in the world of real estate investment comes when you learn about wholesaling which is also known as flipping properties. The profits in this area of real estate come from properties you don't even own!
A typical flip deal involves an buyer who contracts to purchase, usually a distressed property from an eager seller. Then makes a profit by reselling it for a higher price to a property retailer.
You may ask how can I profit from flipping? What you do is find a house that meets your characteristics, place it under contract, and then assign this contract to another buyer that closes on the property in your place. It doesn't matter if you bad credit? When you wholesale, credit is not an issue. Also a wholesale transaction requires little or no money down. And thats great for fresh real estate investors.
How can you find a property to flip? Create a "We Buy Houses" ad to find properties that have equity. If you put the right ads in the proper locations in the city, you'll have plenty to choose from. Most of these sellers coming to you will be in financial distress (foreclosure, etc.) or the properties may need rehab.
Let's make an example to further point out flipping. After placing ads, you come across a property that has an ARV or after-repair value of $100,000. This property is currently in foreclosure and needs $20,000 worth of repairs. The sellers of the house owe $30,000 and will need $8,000 for their relocation expenses.
In this situation, discuss with your Realtor to negotiate a purchase contract for 38K. Make sure to write "and/or assigns" after your name when writing the contract!
How can you find a buyer? Set up local ads while using phrases that attract attention, such as Thousands Below Market Value", While planning for the sale price, make sure to leave enough room in the deal for the incoming retailer.
In this example, you can flip the lead to a rehabber for 48K, thus making you $10,000 in profit!
The rehabber purchasing the house will invest $20,000 for the repairs, and will still have a $32,000 or more profit potential on the investment. It's that simple: Find the deal. Find the buyer. Let the title company do the rest.
A great tip to make your future investments easier is to create a buyers list. This is a list of potential retailers and rehabbers that you've worked with in the past or have contacted you about deals. Often, you may want to rehab a property yourself but you other properties that demand immediate attention. You can then make some quick cash by selling these excess retailer to another buyer.
A cardinal rule of investing in real estate is that whenever someone calls to find about one of your properties, always make sure to get their names, phone and fax numbers, and email addresses. Find out what type of properties they're looking for and how much they're willing to spend.
Even after you sell the property, continue to run your ads. Therefore you can get as many potential retailers as possible to add to your buyer's list. What's great about this is that whenever you get a new deal under contract, you now have an entire list of potential buyers to call and email!
One of the greatest parts of flipping real estate is that it's a way to get fast money without worrying about your credit score or down payments. As long as you put in the work and have the right professionals on your team, wholesaling is a great way to earn cash even if you are just beginning real esate investing.
About the Author
To learn more about wholesaling real estate please visit http://teachmetowholesale.com
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