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