If you want to maximize your profits off of a property, then the way to do it is to flip properties. Flipping properties is a term that is commonly used in real estate. Property flipping refers to the purchase of a real estate by a certain investor and quickly reselling it at a higher price in just a matter of days or a few months. If you want to invest little and make more, then this is a great way to get into the real estate business.

Property flipping is a growing trend in the U.S. real estate sector. It is legal and can be a potential source for huge income if you know the ins and outs. The process is not easy but learning about it might entice you to try it out yourself. Usually, you will begin flipping a property by finding a home that is under priced for the current real estate market. These are usually called 'fixer upper' homes and are available all the time on the market. Any type of foreclosure, home at an auction, or home that has been neglected can be bought for a lower price. Flipping properties will most likely be done by dealers or retailers, but it is possible for anyone to take part in the art of flipping properties.

Flipping houses for a profit became popular from 2001 to 2005 during the housing boom in the U.S. However, this method of investing in real estate continues to grow and I expect a large increase now during the current lower prices real estate market. There are actually two common ways to flip a property.

The first one is to contract a house and resell it at a profit without occupying the property. For example, you locate a property that is worth $250,000 which you contract for $140,000. You turn around and assign the contract to another investor or rehabber for $150,000 or 60% of the market value of the property.

Many times these homes require no fixing or little investment. As shown by this simplified example , these transactions can be a win-win situation for all parties involved. The seller, sells the property and removes a liability or prevents a foreclosure. The wholesaler, makes a fee when the contract is assigned and the transaction closes. The buyer acquires a great buy which will allow him/her to profit on the transaction since he/she bought the property at such a discount.

Fix and Flip
The other method is acquiring a property, renovating it and then selling it again for a profit.

After you have found a home that needs some fixing, you will buy it like you would any other home. Usually, you will be liable for going through the mortgage process and will sign a deed of trust for the property. When you do this, you will want to make sure that you do it as a business instead of an individual. As soon as the paper work is done, you can move into the home, make some changes, and put it back on the market for a higher price.

Although there are many honest investors engaged in this kind of business, those starting out should be wary of fraudulent investors. Unfortunately, we have scammers in our profession which have tainted legal methods of investing such as flipping properties. Flips have been linked to scams such as “straw buyers” where the scammer uses a variety of schemes to submit false documentation or even colluding with mortgage brokers, realtors, and/or appraisers to inflate the price of properties. Bottom-line they are not real estate investors, they are scammers.
If you are a new real estate investor, I suggest that you seek guidance from other professionals in the industry who have been around for a while and can share with you their experiences and wisdom. There are many of them on this site. Invest in yourself and purchase some training materials, if you are interested in learning about wholesaling one reading I recommend is "The-New-Rich-Guide-To-Investing" by Matt Gerchow, you can reach him on our site or visit his website http://www.mattgerchow.com.

Investors can gain huge profits in flipping properties if they know how to do it right. Be an informed real estate investor.

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