Posts Tagged ‘option to purchase’

Make Money Flipping Real Estate – How to Fip Properties for Profits

If you’re on the lookout for a reliable and effective way to earn money, you might want to check out how to make money flipping real estate. Flipping real estate is the hottest way to make money in the real estate business these days.

Especially with the current credit crunch, if you have the capital, there are plenty of cheap real estate deals since there are more foreclosures and seized real estate auctions available.

Lack of cash or credit does not have to stop you from making a profit from buying and selling real estate.  As a new investor you should seek out wholesale house deals.  You can write an option to purchase contract and then sell the option to buy to another buyer or investor.  Your risk is zero (using good language in your option) and your investment could be be as little as ten dollars for earnest money.

There are many ways with which you can profit with real estate. You can let others do the work, or skip renovations entirely and still sell the house as is, or put the newly fixed house up for lease, not rent. The most popular strategy, however, is the “fix and flip,” which is basically buying property and selling it quickly.

If you know how to do things right, the “fix and flip” is as easy as it sounds. First you buy land with a run-down house. You can check out some of the foreclosure listings or seized real estate in your local classified ads.

Another way is to go online and research some of the online seized real estate auctions.   HUD and many housing authorities have homes you can buy as cheap as one dollar.  Check their websites for the lists. You can get a pretty good idea of the current market value of the homes in the area you plan to buy and sell.

Afterwords,  you make the necessary developments, including fixing the house. Then you sell the entire property. You can gain a huge amount of profit if you buy the house for a cheap price, pay for reasonable renovating expenses, and sell the property for or above its market value.

Your profit will depend on a lot of factors. These include your ability to get a bargain for the real estate you’re interested in, a good estimate of the cost and time required for repairs and renovation, and employment of a real estate agent to help you sell the finished product.

Like other businesses, to make money flipping real estate also takes good marketing and right timing.

Flip Houses Online

Nowadays, real estate market always changes its supply and demand quickly. While some people want to sell their house in haste, the other is going to buy house immediately. To you, this is a good chance, because you can earn much money from the change. But the efficiency is low. If you want to ensure your high successful rate, you’d better make use of internet and learn how to flip houses online.

Step1

Evaluate your potential property. There are no guarantees in real estate. However, if your property meets certain requirements, you can make an educated guess about how investors will react. For example, a property needs to have a fair amount of equity in it for the investor to justify the sale. Also, if the property needs repairs, you will need to get estimates for these as well as comparable prices on other houses in the area. Once everything is factored in, the investors will still want to see a significant profit potential at the end. For example, a house that appraises for $100,000 and that needs $20,000 in repairs will not be a good candidate if the seller wants $70,000 for it, because that leaves the investor with only about 10 percent equity after he completes the repairs. Obviously, you should consult with a financial professional for help in determining if a property is viable.

Step2

Get the property under contract. If you determine that the property is worth trying to flip, get it under contract. Your contract needs to allow you to assign the contract to another investor as well as protect you in the event that the property does not flip so that you are not stuck with the house. You can find contracts for this type of thing online, or you can hire a lawyer to draw one up for you (see Resources below). You should never use a contract that has not been approved by your lawyer.

Step3

Build a page on your blog with the details about the property. Once you have the property under contract, build a blog page devoted to this property. It should include every single detail you know as well as address issues that the investors may have, such as why you do not keep the property for yourself if it is such a good deal. This particular issue is easily resolved by pointing out that you simply do not like to hold property, but prefer to flip because it is easier, even though a long-term investor makes much more money.

Step4

Notify your email list of investors that you have a property. Send your list of real estate investors an email that directs them to your blog page where they can learn all about this property opportunity. Let them know how to get in touch with you if they are interested in doing the deal. Do not give them contact information for the seller, or you may find yourself excluded from the deal.

Step5

Select the most promising investor and work with her to do the deal. You can do the due diligence work yourself or make that part of the investor’s responsibility. Before the contracts are signed, you should run everything by your lawyer again to make sure that everything is properly written up.

Step6

Take your cut and remove yourself from the transaction. Generally, you will receive your cut when the transaction closes. Remember, once you sign the papers, this is no longer your deal, so you do not need to field phone calls or help with due diligence unless your contract stipulates it.