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