Flipping Houses, Flipping Homes for Quick Cash
First, right off the bat, off let's tackle the "Is flipping
houses illegal?" question. Flipping homes or flipping anything
for that matter, real estate or otherwise, is perfectly legal.
The term has recently been used in the main stream media to
describe what is essentially mortgage fraud. In a mortgage fraud
scheme multiple people collude to inflate and falsify
appraisals, doctor and falsify loan applications, invent fake
people etc. That is definitely illegal and can get you serious
jail time. But here's the thing I could never understand....you
can only do that once or twice and then, even if you get away
with it up front, you are a fugitive for the rest of your life!
Is one big check worth that? Real, honest flipping is defined
generally as one person finding an undervalued opportunity in
real estate and getting that property under contract to purchase
it. He or she then sells or "assigns" that contract -- for a
fee-- to another investor and that person actually closes on the
property. The person buying the property usually does not even
need a mortgage - they just write check. It's really a pretty
symbiotic relationship. Finding great deals takes time and
people with money and the resources to fix properties don't
usually have lots of that. People who are interested in getting
involved in the business usually have lots of time so they do
the leg work to find the house. Also people, like me, who
dislike the management of crews and the time consuming work of a
rehab project prefer to be the wholesalers and to make a
business of it. I actually prefer the term "wholesaling houses"
to flipping. All business have wholesalers in the distribution
chain, this is no different. For over seventeen years now I've
felt like a kid on a treasure hunt every morning. My job is to
dig up the gold, to find the diamonds in the rough.. This the
only really high paying profession I know of that you can start
with just a small amount of education and mentorship and a
little bit of guts. A profession where you make your own hours
and YOU determine how much money you're going to make. I'm often
asked "how do you find all those great deals, Mike?" Finding
undervalued houses is not rocket science. I call it "reverse
sales". By reverse I mean you aren't selling something you're
buying it but most of the same principles apply. You need to
prospect or create a steady stream of sellers to talk to. Now
like the new salesman you can start by knocking on doors and
cold calling or you can work the smart way. You can advertise to
find home sellers motivated to sell now! Advertising driven
wholesaling is changing the face of the real estate investing
business very rapidly. Large companies like the huge
HomeVestors, small mom and pops and smart individuals are all
advertising to buy houses. Advertising works, plain and simple,
you see bandits signs, billboards, television and radio spots
and of course the ads in the newspapers. What the new or
inexperienced wholesaler does not know yet is the term or
concept of ROI, that's return on investment. The phone will ring
but is it cost effective? Are you keeping track of what it costs
you to buy each deal? Do you know which method is producing the
best returns for your invested dollar? Study marketing not real
estate. The business of finding undervalued deals is changing so
fast that almost no one can keep up. Don't be left behind. The
advertising driven, ROI business model is taking over the once
private, very localized business of flipping houses. Big,
organized companies are now getting involved because there are
big profits to be had. Don't be under the misconception that you
need lots of money to start. I started with hand written signs
on telephone poles and three line ads in tiny local papers -
very inexpensive. Get in the business now and stake claim to
your niche in your town. What other business can you earn fees
of $3,000, $5,000, $10,000 or more for a few hours work driving
around looking at houses?