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Learn About Real Estate Flipping If This Option Is For You

Feb 16, 2008
Over the course of the past fifteen years, a good number of individuals have ended up making a good deal of money by flipping real estate. In this article, you'll be presented with a consideration of factors that will help you in determining whether or not flipping is the right option for you in 2008. In the simplest of terms, real estate flipping involves purchasing real estate at a lower cost (oftentimes properties that requires some rehabbing or other work before it can be put on the market for sale).

The usual steps undergone in flipping are finding a property with the above description, buying the property, and repairing the things needed to be repaired to increase the value of the property before reselling it. As soon as the rehabilitation has been done, the property is now ready to be sold at a higher price to the new owner. It's vital for you to factor in the rehabilitation cost, the cost you incurred during the whole process - e.g. the cost of renovation - and your markup for profit.

Like what is stated in the beginning of this article, a lot of real estate investors have been making good amount of money by retailing properties. But some people found ways to illegally twist this strategy in order for it to work more to their advantage. Grave criminal charges have been filed and people have been convicted of crimes related to flipping properties in recent years.

If you want to enter real estate investing and you want to try flipping as your main strategy, be sure to follow the rules and regulations that govern this business. Because there are no crimes that goes unpunished and instead of making money, you might end up losing some and you may even face a law suit against your action.

You also need to be aware that more often than not, the properties open for flipping are rundown properties that needed repairs and rehabilitation; structurally unsound properties that are offered at a low price. You need to know that these properties would not sell in the market if you don't do some rehabilitation work on it to make it market worthy. This is a common knowledge in flipping; see to it that your estimated cost of repairs wouldn't hurt your profit in the end.

Considering what is stated above, you'll be better off if you know firsthand about minor repair work or have a team ready to do the work for you at a very reasonable price. Making a substantial profit in flipping is easier if you have a competent team that will efficiently work for you in short notice.

In fact, experienced real estate investors retain a team of workers that they can call if they need something rehabilitated. They've developed a good business relation with these contractors that they can arrange a deal in which the payment could be done after the property is sold. Your success in real estate investing should be easier to achieve if you have a similar team ready to work for you.

When all is said and done, the fact remains that the real estate industry is facing a changing time where flipping may not be as viable an option like before. It's important for newbie investors to have enough understanding about property acquisition, rehabilitation and all the things involved in it, and selling in order for them to be successful in employing flipping as a real estate investment strategy.
About the Author
About the author: Jacques Coquerel is a real estate investor based in Atlanta, Georgia. He has made more than 750 real estate transactions since 1996. For Real Estate Investing Tips get his free course Real Estate Investing Free Course.
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