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Happy 2019

Posted by RuyM on January 3, 2019
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Happy New Year everyone! Here we are at the beginning of a new year and it’s the time to start making (and keeping!) those resolutions.
If one of your resolutions is getting into real estate investing, you should know real estate has probably made more millionaires than any other investment product…

A full-time or part-time venture into real estate investing offers many financial and personal rewards, including cash flow, security, and long-term wealth. There are many ways to profit in real estate; the questions is, which one is best for your!?

I will be talking about the real estate investment terms flips & wholesaling here, but you can read about Buying & Hold here.

Real Estate Investing

The traditional concept of investing requires for someone to invest money on a particular investment vehicle and then wait for it to increase its value for a profit. Real Estate is no different. Typically, people buy real estate for income and appreciation. They expect that after 30 years or so, their mortgage is paid and they will receive a generous cash flow for their retirement years.

Some buy and hold properties, and build up a portfolio of rental properties, become landlords and take advantage of the monthly cash-flow. Rental properties continues to be an excellent method for creating long-term wealth.

Others, just want to buy, fix and get rid of the property as fast as possible. Some don’t even own the property and just sell you their contract rights to the property. And that’s what we will be talking about below.

Flipping Real Estate Properties

Real Estate, like any other investment, is bought and sold every day. Usually by a licensed professional real estate agent or broker. Agents and Brokers help facilitate a sale by finding a willing buyer for a willing seller, earning a commission for making the deal happen.

Just like agents and brokers, investors who want to get into flipping real estate have to accomplish the same basic tasks. As a flipper investor, you are the buyer and the seller. Furthermore, the profits potential is much greater than an agent. The flipper investor doesn’t need a license to buy or sell his own properties. But a good knowledge of real estate or having a license will increase your chances of being successful. As well as extra business and income by helping others who may need to buy or sell their properties.

The Different Types of Flipping

When the word flipping real estate properties comes into the conversation, usually two types of investors/flippers come to mind. Wholesalers and Fix and Flip investor.

Wholesalers
Wholesalers like real estate agents and brokers, locate deals for other investors. He finds a bargain property and signs a purchase contract with the owner. He then can close on the property and sell it outright, or do what the majority of wholesalers do, and just sell his contract to another investor, usually an investor/contractor who will fix the property and sell it retail.
Wholesalers usually put up a deposit to secure the property, so he takes more risks than an agent or broker does. The wholesaler often resells the property in its “As Is” condition. However, some increase their profits by cleaning up the properties.

Wholesalers can flip as many properties as they can find. On a full-time basis, a wholesaler can make well above $15,000 a month withput ever fixing a property or dealing with a tenant. On a part-time a wholesaler can easily make an extra $3,000-$5,000 per month flipping a property or two.

The Fixer and Flipper
The investor doing fixing and flipping, usually buys its properties from a wholesaler or with assistance of agents and brokers to find them great deals or discounted properties. The fix and flip investor’s goal is to fix up the property as fast as possible, so it can be sold for full retail price to an owner occupant. Compared to wholesalers, the fix and flip investor puts up the most money, take the most risk and stands to make the largest profits on each deal.

Before one can become a successful fix and flip investor, you must have good understanding of how a renovations is done, the cost of doing the renovation and the value of the property after the renovation is complete. A fix and flip investor who pays too much for a property will have a difficult time reselling it, if the value of the property is above its retail price for the area.

Every investor should know how to sell properties quickly. You should never enter into any investment without knowing your exit strategy. Are you going to find and flip the property to another investor, or are you going to fix it and flip it as retail?
These are important questions you need to know prior to making offers on properties to buy. When you getting started, you can sell your first properties to fix and flip investors to generate capital. You should not be greedy, but you can make about $3,000 to $5,000 on your first flips as a wholesaler. But you must remember that when submitting offers, you have to include enough room in the deal for someone other than you to make a profit. You cannot resell a property to another investor if no profits are left.

Remember the object of the wholesaler or fix and flip investor is to find the property and get rid of it fast…. Dont get greedy! and good luck!

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