Many beginning real estate investors start out selling real estate to make a quick buck. If you want to make more money 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. People often 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 properties. 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 down payment by:

• Finding a seller under stress with a bargain property
• Secure a sales contract
  
• Sell ​​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 by inflating the value of the property and the qualifications of the home buyer. Often these home purchases had little or no money to start with. When these new homeowners defaulted on their mortgage, mortgage lenders lost money because the house wasn’t worth the inflated purchase price.

To avoid legal problems in the sale of real estate, do not commit mortgage fraud.

To make money selling real estate:

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

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

3. Find a bargain property owned by a seller under stress to sell.

4. Secure a sales contract in your favor.

5. During escrow, plan your selling actions.

6. Close the property on time.

7. Immediately put your sales plan into action. If the property needs fixing, be prepared to do it right away.

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

9. Find a qualified buyer. Have a loan officer verify that your buyer meets all mortgage requirements.

10. Stay legal. Don’t 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 profits!

Copyright © Jeanette J. Fisher