"Mirror" is the buzzword of the year in real estate - Books mirroring, flipping articles in the newspaper, and even mirrors show on television! What is mirroring how it works and how you can benefit?
Flipping simply means buying a property and sell it quickly, such as participation in a property long term rentals to meet. Flipping comes in several varieties, most of which are legal and profitable, some of which are not.
Flip Strategy # 1: Buy, fix andFlip
Let's start with the most common form - the good, old "fix 'n flip". This process involves the purchase of a property that needs work, fixing it, then live out the sale on the "retail" market, ie to a person owned. This method is tried and true, and works very well. You can easily $ 15 - $ 50k on one deal, depending on your market and how good you are to find bargains.
The danger in fix and flips is either paying toomuch or underestimating repairs. Be very conservative in your fix-up costs and long may it take to sell. In addition to that you in your analysis of the cost of paying an estate agent to sell the property.
Flip Strategy # 2: Buy, Refi & Lease / Option
Instead of selling property prepared for all cash, sell for terms. Once you complete the rehabilitation, refinancing the property at the new appraised value. If you do the math correctly, you shouldlittle or no money in the business. Sale of the property on a lease with option to buy. Rent payment from your tenant / buyer should cover your mortgage payments (if not, consider an interest rate or floating rate loans, which is set for 3 years). If your tenant exercises his option to purchase, you will benefit a larger profit, not because you pay a broker. If the tenant exercises his option after 12 months, you benefit from a lower capital gains tax.
FlipStrategy # 3: Buy & Flip "As Is"
Do not correct me-up work to be done? Consider selling the property "as is" as a light fixer upper. If the local real estate market is hot, it should be possible to create a flat in a poor state to sell only a little below the market price. This is particularly the case with houses in the "transitional" neighborhoods. Make sure, of course, you acquire the property sufficiently cheap enough that you can sell it below market price quicklyand still profit.
Flip Strategy # 4: Wholesale
Strategy # 1, the fix and flip, is very popular, which means there are a number of investors looking for rehabs. You can buy the property cheap and sell it for only a few thousand dollars more to another investor without any work. They are not nearly as much as the Rehabber, but you will quickly realize your profit.
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Flip Strategy # 5: Pre-Construction
In very hot realReal estate markets are estimated prices, as much as 2% per month. If you have time things right, you can put a contract on a pre-construction house or condominium, then rotate it to someone else when the development is completed. If it takes 12 months for the development to be complete, and the apartment price is $ 500,000, you can make $ 100,000 or more in one year! Of course, the opposite is true - you could end up losing money if the local economy tanks and you end up with a worthless condo that youyours may not have paid more than you. Use this approach very carefully ...
Flip Strategy # 6: Scouting
The Scout is an information collector, so not technically a property flipper. He is the "Bird Dog," finds the potential deals and sells the information to other investors. Many people began as a scout for other investors, because it does not take money or knowledge to look for distressed real estate. The Scout finds a property for sale, collectsthe necessary information and then provides this information to investors for a fee. The fee depends on the price of the property and the profit potential. The Scout can expect five hundred to one thousand dollars every time he to make informed that leads to a purchase by another investor.
Flip Strategy # 7: Illegal Flipping
OK, I'm not sure this approach because it is illegal. Illegal property-flipping schemes work as follows:unscrupulous investors buy cheap, run-down properties, especially in areas with low income. You shoddy renovations to the properties and they sell to naive buyers at inflated prices. In most cases, plotting the investor, the experts and mortgage brokers by submitting fraudulent loan documents and a bogus appraisal. The end result is that a buyer pays too much for a house and can not afford the loan. Since many of these loans are insured by the federal government, the authorities haveexamines this practice and arrested many of those involved. As a result, the public takes Flip declared unlawful.
The fact is that "mirror" - as I described at the beginning of this article - is not illegal. Loan fraud in the course of the rotation is what is illegal, so do not confuse the two. The other six ways to flip are very legal, very ethical and very profitable!
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