Some real estate investing "teachers" advise beginning investors to find many houses and to flip the houses quickly for outrageous profits. Perhaps you've seen the claims of real estate gurus telling you how you can make $30,000 to $50,000 per month, without any physical work, and for little or no money out of your pocket. In fact, these promoters tell you that you can get money back when you close.
Let's take a closer look at these fast flips.
How do you find a bargain for $30,000 or more under market, for no-money down, and flip it right away? First, you would need to find a seller so desperate that they sign over their home to you. I'm not saying that this can't be done. It's just nearly impossible in today's real estate market. Today's sellers know they can sell their home fast and still get a fair price by only discounting the property by $10,000, without the seller carrying the financing. This is because there are so many home buyers looking to purchase a home to live in.
How does this affect the beginning real estate investor who was promised they could find many houses for drastic price reductions? These investors soon get discouraged because the promised method is so difficult to do. Not only does the investor have a hard time finding a home for way under market value, the investor with no money to put down has two obstacles to overcome. No money down and finding a bargain house. These aspiring investors, some who charged hundreds of dollars for bogus investing courses, just give up.
If you're thinking about getting into real estate investing as a way to secure your financial future, be wary of investing systems that worked last century. Learn about real estate customs in today's fast-paced market.
The real way to make money on fast flips is to get yourself ready to cash out a desperate seller fast. You can begin with your first investment home realistically two ways:
1. Buy a home to live in so you can purchase with no money down.
2. Refinance your own home and use the money for a big down payment to encourage a desperate seller to sell fast.
This method works because sellers who need to settle their affairs quickly will sell at a big discount to a buyer who doesn't ask them to be the bank.
You can still build wealth by flipping houses. But, you need to have your finances in order when you go bargain shopping.
© 2005 Jeanette J. Fisher
