Flipping houses as a way to quick cash in real estate investing

written by: Simon Macharia; article published: year 2010, month 05;

In: Root » Legal and finance » Real estate

  Share  
|
  PL  |  NL  |  FR  |  ES  |  PT  |  IT  |  DE  |  DK  |  NO  |  SE  |  FI  |  GR  |  JP  |  CN  |  KR  |  RU  |  AE


Flipping houses is often known as the quickest and easiest way to make cash as a real estate investor. Lots of real estate investors flip houses wrongly because they have no idea how to approach it.

Here are a few reasons why flipping houses must form part of your business model.

1) You do not need to invest in a lot of money
Wholesaling houses, also called flipping houses, is the process of locating houses at a cheap price, then flipping them at a higher price for profit.

You normally flip houses to other real estate investors who buy houses for cash.

Once you find a property below market value, you sign a contract to buy it. The earnest money needed for this is little, from less than $100 to around $500.

The contract is then taken to the title company or real estate attorney to begin title work.

You then locate a buyer as title work is going on, usually a real estate investor. Depending on the profit potential at hand, you sign a second contract to sell to the real estate investor.

You can do a contract assignment where you assign the contract to the real estate investor. In this case the property is bought by the wholesale buyer on your behalf. In other words, the wholesale buyer gains the right to buy on your behalf.

In general, contract assignment is done when there is not a lot of money to be made. The wholesale buyer will find out how much money you make in the deal.

You can also do a double closing, also called a simultaneous closing, where you buy the property, the flip it to another real estate investor on the same closing table. The contract you sign in this case is one where you sell the property as your own.

So in this case, you do two transactions, one where you buy and one where you sell. Your wholesale buyer will not find out how much you earn in the transaction because you sell the property directly to him.

Simultaneous closing is better where you stand to make more money so you do not want the wholesale buyer finding out how much you make.

You probably just need earnest money to close a deal for flipping houses.

2) Only a little work is required for this
When you flip houses, you never fix up houses, the wholesale buyer does. You just need to locate cheap houses then flip them to other real estate investors.

3) You cash your check fast
In general, it takes 3 to 4 weeks or sooner to get paid when you flip houses. As long as title work is done and there is cash to close the deal, the deal is closed.

4) No hassles involving management
No need to worry about tenants; you never keep any houses. You do not have to worry about rehab because your real estate investor wholesale buyer is the one that does repairs, not you.

Ultimately, you will get a healthy cash flow as a real estate investor flipping.

Simon Macharia is a real estate investor in Dallas, Texas. He prefers flipping houses, running his business from his website for real estate investing that also automates is business

Share

Disclaimer

1) E-articles is not responsible for the information contained by this article as well for any and all copyright infringements by authors and writers. E-articles is a free information resource. If you suspect this article for any copyright infringement, please read the terms of service and contact us or use the "Report this article" button on this page to investigate the problem.
2) E-articles is not responsible for inaccuracies, falsehoods, or any other types of misinformation this article may contain and will not be liable for any loss or damage suffered by a user through the user's reliance on the information gained here.