Real Estate Investing: Flipping Properties

A lot of people these days are preaching about the buying and holding method of gaining wealth with real estate. There indeed may come a time in your life or business when you?ll want to hang on to a piece of property, although you?ll only be interested in keeping certain types of property. If you?re just starting out, flipping a house may be an ideal way to get started.

Basically, there are three ways that you can flip a house, although each one has its own terms, motivation, and type of property. The first method is known as retailing. What this means, is that you buy a house in bad shape, do the repairs to fix it up, then turn around and sell it. There are a variety of houses in need of repairs out there, and several ways that you can quickly flip a house to net profit. All you need to know are the techniques that will get you the most money in the least amount of time.

The second way you can flip a house is though wholesaling. Wholesaling involves finding a home for sale then flipping it to an investor for a fast, yet small profit. To do this, you?ll need to know the real estate investors in your area, the types of homes that flip the best, and how to fund your property so you can flip it to them. If you live in a big area or a city, you?ll find that using the wholesaling method of flipping houses is actually easier to accomplish.

The third way to flip a house is by assigning the purchase. Using this method, you?ll commit to buy the house. Instead of closing the deal yourself, you?ll assign it to a real estate investor - of course for a small fee. The investor will take the contract over and close the purchase themselves - flipping the house. This can be very profitable, especially if you invest in the right home. You don?t need to have your contract worded any special way to be legal, although you will need to determine the assignment fee.

If you?re looking to break into the real estate market and make big bucks, you?ll need to learn all about flipping houses. Flipping houses is very profitable, especially once you have learned the basics. The first and third methods are the best, although they will both take quite a bit of work on your part. Restoring homes isn?t easy, and you?ll need to have a team qualified to handle any repairs. Assigning the purchase may be difficult when you first start out, although it will get easier with time. If you stay at it and do your best to make a profit - you?ll be an expert at flipping homes in no time at all.

About the Author:

Mark Estates writes for multiple real estate and foreclosure investing porgrams such as SharkBaitSoftware.com.

“How To Increase Your Net Worth By $20,000 to $100,000 On Every Real Estate Investing Deal You Do”

Consider these parameters for a real estate deal:

Consider these parameters for a real estate deal:

Property Value: $250,000
Purchase Price: $160,000
Repairs: $2,500

If you analyze the numbers, you see that the equity available in this deal is $87,500 (Property Value minus Purchase Price minus Repairs).

So here’s a hypothetical question for you: Assuming that the information above is accurate, and the property is located in an area that you view as acceptable and/or favorable, then:

If I offered to give you this deal in exchange for $10,000 in cash, would you do it?

Remember - this is hypothetical. The real question here is this:

Would you exchange $10,000 in cash for $87,500 in equity?

For most smart investors, the answer is: Absolutely YES!

And this is called “Wholesale Real Estate Investing” - the process of buying a lot of equity at a very significant discount from another real estate investor who has already done the hard work of finding a deal and getting it under contract.

Just think about that - consider how easy real estate investing would be for you if you had a network of real estate investors in your area (and maybe all over the country) who, several times each month, offered you the opportunity to purchase significant amounts of equity for a severe discount…

…It would be quite easy to become wealthy, wouldn’t it?

The answer is: Yes, it will.

You’ve got to admit - it will be a pretty wonderful thing when you know how to find great real estate deals in which you can trade a small amount of cash for a large amount of equity without even having to find the deal yourself…

…and that’s exactly what wholesale real estate investing is all about.

Wholesale real estate investing is conceptually very simple. Here’s how it works:

First, “Investor A” finds a great real estate deal with a lot of equity. Typically, Investor A will have spent a significant amount of time, money and expertise to find the deal, negotiate the term and get the property under contract. By putting the property under contract, Investor A now has control of the property, and the equity in the property.

(For this example, imagine that Investor A has found a property worth $200,000 and has set a purchase price of $115,000 and he also knows that there are $15,000 in repairs, which leaves an equity position of $70,000).

Second, “Investor A” finds another party, “Investor B”. Investor B recognizes that the contract that Investor A has established is worth $70,000 in equity, and so he strikes a deal with Investor A to turn the deal over to Investor B in exchange for some amount of cash (we’ll use the value of $12,000 in this example).

So Investor A is giving up $70,000 in “potential” profit in exchange for $12,000 in current profit. And Investor A is paying $12,000 because he believes he can make more than that on the deal, since there’s a full $70,000 of equity.

This deal between Investor A and Investor B is called an “Assignment”, because Investor A is assigning the contract to Investor B.

Third, Investor B does his “due diligence” to confirm that the deal is as good as he thinks it is.

Finally, Investor B closes the purchase of the property, and Investor “A” receives the assignment fee from Investor B.

This is, obviously, a simplification of the process. But this is essentially how it works - not so difficult, is it?

ABOUT THE AUTHOR

Know the Real Estate Industry Before Investing

Although many ruthless brokerages and developers publish information on the profitability of real estate investment that conveys the faulty notion that anyone–even if these wannabe entrepreneurs are deficient in either start-up capital or mental capacity–real estate investment is not suitable for everyone. Popular myths lead the na?ve public to believe that investing in today’s hot real estate market guarantees overnight profit, but earning a significant cash flow from an investment property is only a possibility for experienced and/ or educated investors well versed in the truth about the real estate market and the steps they must follow to obtain success.

Prospective investors must carefully research the property they’re interested in, and learn everything about the local market, its trends, and investment returns on properties similar in price and quality to gauge the profit potential of the property in question. The ability to finance the investment–and have enough money left over in case the investment backfires–is essential for obvious reasons. Real estate investing is not a surefire get-rich-quick scheme (these do not exist), nor is it a gamble on a table with a minimum of $5. Real estate investment requires a significant amount of start-up capital and enough money in savings to provide a cushion, but savvy investors are constantly finding ways–via working with reputable brokerages and obtaining good financing plans–to minimize down payment costs.

Different types of investment properties are suited to investors with different goals for their investments and the amount of time and energy they wish to devote to the properties. The length of time the investors wants to hold the property is an essential variable to consider, as both options yield great potential for profit with varied amounts of time and effort devoted to maintaining the properties in question. Investors also must choose between commercial or residential investment and carefully research the sub-categories within these two general investment options.

Although learning all about the real estate market to invest with knowledge is the most important aspect to achieve success in the real estate investment market, acting quickly is also essential. Buying before the competition is key to getting the best deals and selling quickly is just as important to avoid having to pay a second mortgage on an investment property that is difficult for most people to afford. Joining with a respected, experienced brokerage allows a novice investor to purchase expertise that can help make the most profitable investments as quickly as possible while the market is still hot.

About the Author

YAERD offers real estate investing advice, Hernando Preconstruction information, and tips to new and veterans in the real estate industry. You will also find information on Jroberts New Construction Homes, and Florida Spec Homes.

For A New Real Estate Investor The Idea Of Investing In Foreclosures Can Look Temptingly Attractive

You might be looking for “How to make a zillion dollars in 3 months”, well, you won’t find that here but if you want some practical tips, you came to the right place. Read on …

To the newbie real estate investor, foreclosures can look temptingly attractive. Who wouldn’t want to make a quick profit of 50% or more? But whether a foreclosure deal is really sugar or merely sweet-tasting arsenic depends on a list of complex factors.

Foreclosure is an officially permitted process in which a mortgage holder repossess a property due to failure to pay on a loan. Some states in the U.S. allow ’strict’ foreclosure ? the borrower has a definite time in which to bring the debt up to date, after this, the title reverts back to the lending institution.

You want to stay out of any legal processes going on concerning a property. Don?t get tempted to jump in and help the current owner in hopes of partial or whole ownership, this is suicidal. Pick another great deal. Never fall in love with a property. You have to maintain a business-like demeanor in all your dealings.

Be sure you understand that in many foreclosure proceedings, a borrower might have the ‘right of redemption’. This legal claim will let them have a particular amount of time in which to ‘cure the loan’. That is, they are allowed to make back payments, shore up credit, etc., and then they are allowed to reclaim property title to, and the possession of, the property. Beware!

As soon as the foreclosure procedure is complete, or at minimum unavoidable, you may initiate an action plan to obtain the real estate. Watch for transactions in which, at least, a Notice of Default has been given out.

Public sales on foreclosed possessions are common but can be complicated. Always do your homework before actually making a bid on a property. There’s no alternative for gaining first hand familiarity of the physical state and legal standing of a property.

Be sure to take into account that foreclosures are sold ‘as is ‘, or, in its present condition. Contrasting other property sales, no warranties are made available and no title insurance approved.

At least, you’ll be required to have a professional inspection carried out, even if you are a well-informed investor. Some investors are, of course, qualified inspectors themselves ? besides wearing various other hats.

The property does not need to be free of every little fault, but you’ll want to be aware of the roof - does it or does it not need to be replaced, that the plumbing is ok, there are no severe foundation cracks, or possibility for flooding, etc. If any of those are there, they can be satisfactory if you’re searching for a ‘fixer-upper’ and are prepared to invest the time and funds to make repairs. Mark down your offer for that reason.

Soon you will hear about a ’short sale’ deal. That is, this comes about when a lender is prepared to allow lower cash settlement for a property than is outstanding on the loan now.

And yet another kind of foreclosure situation is the REO ? real estate owned (by the lender). Usually these are properties that were auctioned but no one bought them. You can, potentially, get an extremely good deal, but you will need to exercise extreme caution and keep your eyes wide open.

Ok, so bear in mind to follow a line of investigation. Have a systematic inspection done and complete a satisfactory title search. Any key defects or impediments in the form of tax or other liens have to factor big in your strategy.

Real estate, like other endeavors in life, requires diligence and a grasp of the fundamentals to be successful. Learn to tell the difference between a good deal and one to walk away from without losing your shirt in the process.

All things considered, real estate investing is still the best game in town. So go out and make your fortune and say ‘Hi’ to Donald Trump for me!

Real Estate Investing: Flipping Properties

A lot of people these days are preaching about the buying and holding method of gaining wealth with real estate. There indeed may come a time in your life or business when you?ll want to hang on to a piece of property, although you?ll only be interested in keeping certain types of property. If you?re just starting out, flipping a house may be an ideal way to get started.

Basically, there are three ways that you can flip a house, although each one has its own terms, motivation, and type of property. The first method is known as retailing. What this means, is that you buy a house in bad shape, do the repairs to fix it up, then turn around and sell it. There are a variety of houses in need of repairs out there, and several ways that you can quickly flip a house to net profit. All you need to know are the techniques that will get you the most money in the least amount of time.

The second way you can flip a house is though wholesaling. Wholesaling involves finding a home for sale then flipping it to an investor for a fast, yet small profit. To do this, you?ll need to know the real estate investors in your area, the types of homes that flip the best, and how to fund your property so you can flip it to them. If you live in a big area or a city, you?ll find that using the wholesaling method of flipping houses is actually easier to accomplish.

The third way to flip a house is by assigning the purchase. Using this method, you?ll commit to buy the house. Instead of closing the deal yourself, you?ll assign it to a real estate investor - of course for a small fee. The investor will take the contract over and close the purchase themselves - flipping the house. This can be very profitable, especially if you invest in the right home. You don?t need to have your contract worded any special way to be legal, although you will need to determine the assignment fee.

If you?re looking to break into the real estate market and make big bucks, you?ll need to learn all about flipping houses. Flipping houses is very profitable, especially once you have learned the basics. The first and third methods are the best, although they will both take quite a bit of work on your part. Restoring homes isn?t easy, and you?ll need to have a team qualified to handle any repairs. Assigning the purchase may be difficult when you first start out, although it will get easier with time. If you stay at it and do your best to make a profit - you?ll be an expert at flipping homes in no time at all.

About the Author:

Mark Estates writes for multiple real estate and foreclosure investing porgrams such as SharkBaitSoftware.com.

Real Estate Investing: Flipping Properties

A lot of people these days are preaching about the buying and holding method of gaining wealth with real estate. There indeed may come a time in your life or business when you?ll want to hang on to a piece of property, although you?ll only be interested in keeping certain types of property. If you?re just starting out, flipping a house may be an ideal way to get started.

Basically, there are three ways that you can flip a house, although each one has its own terms, motivation, and type of property. The first method is known as retailing. What this means, is that you buy a house in bad shape, do the repairs to fix it up, then turn around and sell it. There are a variety of houses in need of repairs out there, and several ways that you can quickly flip a house to net profit. All you need to know are the techniques that will get you the most money in the least amount of time.

The second way you can flip a house is though wholesaling. Wholesaling involves finding a home for sale then flipping it to an investor for a fast, yet small profit. To do this, you?ll need to know the real estate investors in your area, the types of homes that flip the best, and how to fund your property so you can flip it to them. If you live in a big area or a city, you?ll find that using the wholesaling method of flipping houses is actually easier to accomplish.

The third way to flip a house is by assigning the purchase. Using this method, you?ll commit to buy the house. Instead of closing the deal yourself, you?ll assign it to a real estate investor - of course for a small fee. The investor will take the contract over and close the purchase themselves - flipping the house. This can be very profitable, especially if you invest in the right home. You don?t need to have your contract worded any special way to be legal, although you will need to determine the assignment fee.

If you?re looking to break into the real estate market and make big bucks, you?ll need to learn all about flipping houses. Flipping houses is very profitable, especially once you have learned the basics. The first and third methods are the best, although they will both take quite a bit of work on your part. Restoring homes isn?t easy, and you?ll need to have a team qualified to handle any repairs. Assigning the purchase may be difficult when you first start out, although it will get easier with time. If you stay at it and do your best to make a profit - you?ll be an expert at flipping homes in no time at all.

About the Author:

Mark Estates writes for multiple real estate and foreclosure investing porgrams such as SharkBaitSoftware.com.

Real Estate Investing Scare

Just recently, I was consulting a former Real Estate Investor that was in a serious situation that would scare anyone. This investor has twenty-eight properties that he’s personally purchased using bank financing over the last 4 years.

Here’s the typical deal this investor would purchase: The house would have an appraised value of $50,000 and he was able to purchase the property for $30,000.

The bank would then loan him 80% of appraisal regardless what he paid for the property allowing him to cash money out at closing when buying.

OK, follow me so far? So, in this example, he’d pocket $10,000 when he bought the property.

So, you’re thinking - that’s not scary.

Not yet anyway…

Back to the story, he calls to see if I can help by buying the properties from him. I told him I would gladly take a look to see if there was something I could do, but I assured him I couldn’t make any promises.

After, I talk with him a little more, I discover he’s 3 months behind on payments on ALL 28 properties. With all 28 properties, one would need to come up with close to $20K just to reinstate these loans.

But, that’s not the scary part. We still have to see if there’s any equity. And unfortunately, there’s not, therefore I tell him I can’t do anything for him. He’s gonna see 28 houses go to the foreclosure block. Not only will the bank foreclose, they’ll drag his name through the paper causing humiliation, disgrace with his family and his church. The bank doesn’t just foreclose, then go away. They’re gonna stay after him till they get paid. If the bank takes a loss on these properties, which they will, the bank will pursue the following options:

1. Deficiency Judgment:

This will attach to anything this homeowner owns (real estate, cars, boats, motorcycles, etc.) till the debt is paid. Judgments are usually good for a set amount of time. In Alabama, the company has 10 years they can pursue the homeowner to get paid on the judgment. Plus, you should be aware that these judgments then can be renewed after they’ve lapsed.

It’s pretty terrifying to say the least to have some attorney harassing you to collect on a debt.

2. Garnish Wages

After a judgment has been attained, the creditor can and will garnish any wages from the borrower’s pay.

3. Forgive The Debt

Maybe, you think the borrower would love for the bank to just forgive the debt. Even though they forgive the debt, they don’t forget. Because at the end of year they’ll send the borrower a 1099 for unearned income from the loss of the sale of the property they’d loan money on.

Finally, the obvious factor of having a foreclosure is the fact it shows on your credit rating, thus ruining your credit.

Why did I just tell you this information about this particular owner?

I want you to be able to make sellers aware that are in similar situations of exactly what they can expect. See, most investors expect a homeowner to make some logical decision during a totally emotional time like a foreclosure proceeding. Most owners react out of fear, thus making the wrong choice, which is doing nothing but watching the sheriff show up to finalize the eviction after the house has been foreclosed.

Creative Real Estate Investing

When non-traditional methods are used to buy or sell a property, it is termed as creative real estate investing. It refers to unusual methods used for selling or acquiring real estate. Many kinds of creative real estate investing are practiced frequently.

Popular Types of Creative Real Estate Investing Techniques:

Seller Financing: This is an unusual real estate investing technique where the property owner offers to finance the buyer! The owner typically lends a portion of the equity to the buyer and receives regular monthly payments. The mode of repayment may differ, it may be a principle only payment and interest may be fixed or variable, all depending on the contract agreed upon by both of them. Sometimes the buyer gets to assume the sellers loan, which is written as an all inclusive trust deed. Loans for commercial property are termed as assumable loans where as residential loans are termed non-assumable. These two techniques are used widely among the creative real estate investing techniques.

Lease Options: This refer to a person signing a lease as well as an option to purchase the leased property within a fixed amount of time. The options usually are for short durations of time like 12 months etc. and the lessee agrees to pay an additional amount as an option fee which will be forfeited should the option not be carried through. There are lease purchase options that make it mandatory for a lessee to buy the property with the term of the option. The price of the property is fixed at the time of the agreement and no matter what the land value; the lessee has to pay the amount stated in the agreement. Sandwich lease options are methods of buying a lease option and immediately selling it to another buyer for a profit, which will be shared by the owners.

When mortgages are defaulted the owner may try selling the property to the lender asking him to accept a lesser amount than what is owed in the mortgage.

Another technique is to buy bulk property from banks etc and sell them individually for a small profit. Using tax liens to acquire property is also a creative real estate investing technique. Investors buy tax liens from the government and should the homeowner default, the investor may foreclose the house. Some people buy a property that is ugly or old and unfit, make a few changes and give it a facelift, and are able to sell it for a huge profit.

The scope for being successful by investing in real estate is astounding. With careful planning and using creative real estate investing techniques, a person can make a huge profit as well as build a successful career dealing in real estate.

Know the Real Estate Industry Before Investing

Although many ruthless brokerages and developers publish information on the profitability of real estate investment that conveys the faulty notion that anyone–even if these wannabe entrepreneurs are deficient in either start-up capital or mental capacity–real estate investment is not suitable for everyone. Popular myths lead the na?ve public to believe that investing in today’s hot real estate market guarantees overnight profit, but earning a significant cash flow from an investment property is only a possibility for experienced and/ or educated investors well versed in the truth about the real estate market and the steps they must follow to obtain success.

Prospective investors must carefully research the property they’re interested in, and learn everything about the local market, its trends, and investment returns on properties similar in price and quality to gauge the profit potential of the property in question. The ability to finance the investment–and have enough money left over in case the investment backfires–is essential for obvious reasons. Real estate investing is not a surefire get-rich-quick scheme (these do not exist), nor is it a gamble on a table with a minimum of $5. Real estate investment requires a significant amount of start-up capital and enough money in savings to provide a cushion, but savvy investors are constantly finding ways–via working with reputable brokerages and obtaining good financing plans–to minimize down payment costs.

Different types of investment properties are suited to investors with different goals for their investments and the amount of time and energy they wish to devote to the properties. The length of time the investors wants to hold the property is an essential variable to consider, as both options yield great potential for profit with varied amounts of time and effort devoted to maintaining the properties in question. Investors also must choose between commercial or residential investment and carefully research the sub-categories within these two general investment options.

Although learning all about the real estate market to invest with knowledge is the most important aspect to achieve success in the real estate investment market, acting quickly is also essential. Buying before the competition is key to getting the best deals and selling quickly is just as important to avoid having to pay a second mortgage on an investment property that is difficult for most people to afford. Joining with a respected, experienced brokerage allows a novice investor to purchase expertise that can help make the most profitable investments as quickly as possible while the market is still hot.

About the Author

YAERD offers real estate investing advice, Hernando Preconstruction information, and tips to new and veterans in the real estate industry. You will also find information on Jroberts New Construction Homes, and Florida Spec Homes.

For A New Real Estate Investor The Idea Of Investing In Foreclosures Can Look Temptingly Attractive

You might be looking for “How to make a zillion dollars in 3 months”, well, you won’t find that here but if you want some practical tips, you came to the right place. Read on …

To the newbie real estate investor, foreclosures can look temptingly attractive. Who wouldn’t want to make a quick profit of 50% or more? But whether a foreclosure deal is really sugar or merely sweet-tasting arsenic depends on a list of complex factors.

Foreclosure is an officially permitted process in which a mortgage holder repossess a property due to failure to pay on a loan. Some states in the U.S. allow ’strict’ foreclosure ? the borrower has a definite time in which to bring the debt up to date, after this, the title reverts back to the lending institution.

You want to stay out of any legal processes going on concerning a property. Don?t get tempted to jump in and help the current owner in hopes of partial or whole ownership, this is suicidal. Pick another great deal. Never fall in love with a property. You have to maintain a business-like demeanor in all your dealings.

Be sure you understand that in many foreclosure proceedings, a borrower might have the ‘right of redemption’. This legal claim will let them have a particular amount of time in which to ‘cure the loan’. That is, they are allowed to make back payments, shore up credit, etc., and then they are allowed to reclaim property title to, and the possession of, the property. Beware!

As soon as the foreclosure procedure is complete, or at minimum unavoidable, you may initiate an action plan to obtain the real estate. Watch for transactions in which, at least, a Notice of Default has been given out.

Public sales on foreclosed possessions are common but can be complicated. Always do your homework before actually making a bid on a property. There’s no alternative for gaining first hand familiarity of the physical state and legal standing of a property.

Be sure to take into account that foreclosures are sold ‘as is ‘, or, in its present condition. Contrasting other property sales, no warranties are made available and no title insurance approved.

At least, you’ll be required to have a professional inspection carried out, even if you are a well-informed investor. Some investors are, of course, qualified inspectors themselves ? besides wearing various other hats.

The property does not need to be free of every little fault, but you’ll want to be aware of the roof - does it or does it not need to be replaced, that the plumbing is ok, there are no severe foundation cracks, or possibility for flooding, etc. If any of those are there, they can be satisfactory if you’re searching for a ‘fixer-upper’ and are prepared to invest the time and funds to make repairs. Mark down your offer for that reason.

Soon you will hear about a ’short sale’ deal. That is, this comes about when a lender is prepared to allow lower cash settlement for a property than is outstanding on the loan now.

And yet another kind of foreclosure situation is the REO ? real estate owned (by the lender). Usually these are properties that were auctioned but no one bought them. You can, potentially, get an extremely good deal, but you will need to exercise extreme caution and keep your eyes wide open.

Ok, so bear in mind to follow a line of investigation. Have a systematic inspection done and complete a satisfactory title search. Any key defects or impediments in the form of tax or other liens have to factor big in your strategy.

Real estate, like other endeavors in life, requires diligence and a grasp of the fundamentals to be successful. Learn to tell the difference between a good deal and one to walk away from without losing your shirt in the process.

All things considered, real estate investing is still the best game in town. So go out and make your fortune and say ‘Hi’ to Donald Trump for me!

Next Page »