| One of the trendiest real estate investing | | | | Once you've found this type of property, then |
| techniques around today is called "flipping or | | | | you need to put it under contract and lock up the |
| wholesaling real estate". This technique is so | | | | deal. There's a couple of ways this can be done. |
| popular because it requires no real investment | | | | 1. You can put an option on it. |
| money, no credit requirements and pretty much, | | | | (What's an option?) |
| no real estate investing experience. It's the | | | | A unilateral agreement binding the seller to selling a |
| age-old process of buying something at wholesale | | | | property to you exclusively, for a predetermined |
| cost and selling it retail, but with a slight twist, you | | | | price, but at a later date sometime in the future. |
| actually sell the product without ever owning it. | | | | 2. Have the seller sign a purchase agreement that |
| Once you complete the sale the investor can | | | | gives you say, 90 days to close. This is called a |
| walk away from the closing table with anywhere | | | | buyer favorable purchase agreement. It is |
| from 10 to 50 thousand dollars on average. | | | | designed to help you, the buyer. |
| By now I'm sure you can see why this method | | | | 3. Land contract or contract for deed. |
| might be so well liked especially among beginning | | | | (What's a land contact?) |
| real estate investors. There are several so-called | | | | A contract used in a sale of real property |
| real estate gurus out there selling books, cd's and | | | | whereby title to the property remains vested in |
| tapes on the subject for hundreds of dollars but | | | | the seller until the buyer who receives the right to |
| this is one the easiest investing techniques to do. | | | | possession has paid in installments over a long |
| Let's explore what flipping houses entails. | | | | period of time a preset amount or all of the |
| An investor locates an under valued house, | | | | purchase price and upon default by the buyer all |
| preferably a property that needs only cosmetic | | | | payments may be forfeited. Also known as a |
| repairs or what we like to call a "sugar coat deal". | | | | Conditional sales contract, an Installment sales |
| This means a house that will only need paint, | | | | contract and a Real property sales contract. |
| carpet windows or some other very minor | | | | There's a few other ways to lock up a deal also, |
| repairs, definitely no structural issues or roof | | | | just make sure you don't spend any money until |
| replacement deals. You really want a house that | | | | you have the deal secured but let's move on. |
| has been neglected a bit, one that the seller hasn't | | | | When you have secured the deal, then you start |
| kept up very well. These types of properties can | | | | making the necessary repairs to bring the |
| be spotted very easily because they stick out like | | | | property back up to the neighborhood standard. |
| a sore thumb in a well-kept neighborhood. The | | | | That's when I like to start looking for a buyer, |
| paint's peeling, the grass is uncut, it needs | | | | while I'm actually making the repairs, just to get a |
| replacement windows, etc. | | | | head start. This makes the transaction go a little |
| Plus you will make the most profit from finding | | | | smoother. |
| the worst house in the best neighborhood, if that | | | | Now remember, when you bought the house, you |
| makes since. You want to do this because when | | | | paid a discounted price because the home needed |
| it comes time to sell, you want to be able to get | | | | repairs. But now you've the repairs and the home |
| the highest value, make your profit, while leaving | | | | can be sold on the retail market to a retail buyer. |
| some equity on the table for the homebuyer. | | | | This is where you make your profit! |