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Flipping Houses, Flipping Homes for Quick Cash |
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Fixing And Flipping Houses For High Return On Investment Capital
Many real estate investors make $5,000 to $10,000 or more by flipping houses. These investors buy a home from a distressed seller and resell it quickly for a profit. Just because a seller has serious problems like a pending foreclosure or divorce... First, right off the bat, off let's tackle the "Is flipping houses illegal?" question. Flipping homes or flipping anything for that matter, real estate or otherwise, is perfectly legal. The term has recently been used in the main stream media to describe what is essentially mortgage fraud. In a mortgage fraud scheme multiple people collude to inflate and falsify appraisals, doctor and falsify loan applications, invent fake people etc. That is definitely illegal and can get you serious jail time. But here's the thing I could never understand....you can only do that once or twice and then, even if you get away with it up front, you are a fugitive for the rest of your life! Is one big check worth that? Real, honest flipping is defined generally as one person finding an undervalued opportunity in real estate and getting that property under contract to purchase it. He or she then sells or "assigns" that Fix And Flip - The Formula
Making money with a "fix and flip" property is a great way to make money in real estate. However, it isn't about repairing drywall and planting flowers. It's all about how you do the numbers. People often buy and sell a fixer-upper without a... contract -- for a fee-- to another investor and that person actually closes on the property. The person buying the property usually does not even need a mortgage - they just write check. It's really a pretty symbiotic relationship. Finding great deals takes time and people with money and the resources to fix properties don't usually have lots of that. People who are interested in getting involved in the business usually have lots of time so they do the leg work to find the house. Also people, like me, who dislike the management of crews and the time consuming work of a rehab project prefer to be the wholesalers and to make a business of it. I actually prefer the term "wholesaling houses" to flipping. All business have wholesalers in the distribution chain, this is no different. For over seventeen years now I've felt like a kid on a treasure hunt every morning. My job is to dig up the gold, to find Is The House Flipping Hype For Real?
House flipping is hot -- to the point where more than one successful reality TV show has been created to feed the appetite of up and coming house flippers. But does the reality of house flipping measure up to the hype? House flipping TV shows... the diamonds in the rough.. This the only really high paying profession I know of that you can start with just a small amount of education and mentorship and a little bit of guts. A profession where you make your own hours and YOU determine how much money you're going to make. I'm often asked "how do you find all those great deals, Mike?" Finding undervalued houses is not rocket science. I call it "reverse sales". By reverse I mean you aren't selling something you're buying it but most of the same principles apply. You need to prospect or create a steady stream of sellers to talk to. Now like the new salesman you can start by knocking on doors and cold calling or you can work the smart way. You can advertise to find home sellers motivated to sell now! Advertising driven wholesaling is changing the face of the real estate investing business very rapidly. Large companies like the huge HomeVestors, How We Made $45,000 Fixing And Flipping A Mobile Home
In April of 2005, my Mom (who, like me, is also a real estate agent) was looking through our local "Thrifty Nickel" weekly classified ads newspaper. She saw a very interesting ad and brought it to my attention. The seller who placed the ad offered... small mom and pops and smart individuals are all advertising to buy houses. Advertising works, plain and simple, you see bandits signs, billboards, television and radio spots and of course the ads in the newspapers. What the new or inexperienced wholesaler does not know yet is the term or concept of ROI, that's return on investment. The phone will ring but is it cost effective? Are you keeping track of what it costs you to buy each deal? Do you know which method is producing the best returns for your invested dollar? Study marketing not real estate. The business of finding undervalued deals is changing so fast that almost no one can keep up. Don't be left behind. The advertising driven, ROI business model is taking over the once private, very localized business of flipping houses. Big, organized companies are now getting involved because there are big profits to be had. Don't be under the 5 Flip Tips
1. Know the developer. Has the developer had a successful project before? What is the completion date? Do your research? Make sure you have a very comprehensive idea of project completion. I see it more and more where people are holding out... misconception that you
need lots of money to start. I started with hand written signs
on telephone poles and three line ads in tiny local papers -
very inexpensive. Get in the business now and stake claim to
your niche in your town. What other business can you earn fees
of $3,000, $5,000, $10,000 or more for a few hours work driving
around looking at houses?
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