10 ROADS TO REAL ESTATE INVESTING PROFITS TAMERA ARAGON
10. Flipping
- Wikipedia defines Flipping as is a term used primarily in the United States, to describe the
practice of buying an asset and quickly reselling (or “flipping”) it for profit ..This description pretty much
explains property flipping, with there being a slight difference from that description of flipping assets. In real
estate you can get into an agreement to flip a contract you have gotten into before you even buy it. This can
be done with ease when you know exactly what your buyers want, and with no money out of your pocket
utilizing transactional funding. Flipping can also mean closing and quickly reselling your property, sometimes
even doing both transactions the same day – this being subcategorized a “double closing”.
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Advantages: My favorite strategy. You work the deal backwards. You create relationships with
buyers who can close quickly with cash. Then you find a property meeting the needs of your buyers.
This strategy allows you to profit literally from no money down, with lower risk and very little of your
own time.
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Disadvantages: The law requires you to disclose your intent to resell quickly to sellers. When
dealing with banks, this can sometimes cause your offer to be rejected. You must buy properties in
the name of an LLC in order to utilize transactional funding. Setting up and maintaining an LLC will
cost you money. Though the intent of a buyer might be to close on the transaction, sometimes “life
happens” and something causes the buyer to be unable to follow through. You may have to walk
away from earnest money if you cannot find another buyer quickly.
Now that you that you have learned
strategies to consider, you will need to
consider the type of properties you want to
go after, developing a marketing strategy to
find motivated sellers of those deals. In the
next several issues of Real Estate Investing
Wealth Magazine, I will be sharing steps and
strategies on how to profit investing in real
estate 12 different ways.