real estate

Many beginning real estate investors start by selling real estate to make a quick buck. If you want to make more money by investing in real estate, you need to know a few essentials.

What is the definition of real estate flipping?

Simple definition: Buying a property and quickly reselling it, hoping to make a big profit. Typically, people think of selling houses, or buying and selling a house quickly, as the only way to make money selling real estate. However, some investors specialize in other types of real estate, such as land or shopping malls.

Some confusion arises about the process of making money selling property. People who specialize in finding bargain real estate, obtaining a purchase contract, and then selling the contract before taking title to the property are known as “Bird Dogs.” These beginning real estate investors start with no money down by:

• Finding a Stressed Seller with a Bargain Property
• Securing a sales contract
• Selling your contract for approximately $500 to $5,000 to an experienced real estate investor

Isn’t it illegal to sell real estate?

Flipping real estate is not illegal. However, many unscrupulous investors committed mortgage fraud to make a quick buck. Some of these investors, working with mortgage brokers and appraisers, resold homes to unqualified buyers inflating property values ​​and homebuyer qualifications. Often these home purchases had no money or little money to start with. When these new homeowners defaulted on the mortgage, the mortgage lenders lost money because the home was not worth the inflated purchase price.

To avoid legal problems when selling real estate, do not commit mortgage fraud.

To make money selling real estate:

1. Prepare your financing so you can close a deal fast.

2. Know your market so you know what makes a good business.

3. Find a bargain property owned by a stressed seller to sell.

4. Secure a sales contract in your favor.

5. During escrow, plan your sales actions.

6. Close the property on time.

7. Immediately put your sales plan into action. If the property needs work, be prepared to do it immediately.

8. Market your property to your target market. Don’t just list the property and hope for the best.

9. Find a qualified buyer. Ask a loan officer to verify that your buyer meets all the mortgage requirements.

10. Stay legal. Do not use an inflated appraisal. Don’t give your buyer the down payment. Don’t help your buyer create fake W2 forms, write fake letters of credit, or prepare fake documents. You can pay many of your buyer’s closing costs to make the purchase easier.

You can make money selling real estate. Buy low, sell for full market value, avoid mortgage fraud, and enjoy your profit!

Copyright © Jeanette J. Fisher