Why flipping houses is the best way to make money

Why flipping houses is the best way to make money in real estate investing

Flipping houses has been marketed as the easiest and fast way to quick riches in real estate investing. Lots of real estate investors have no clear reason why they should flip houses, so they approach the business wrongly.

The following are a few reasons why you should adopt flipping houses as a business model.

1)You need little to no money of your own invested Flipping houses, also called wholesaling houses, involves acquiring houses at a low price then flipping them for a higher price for profit.

You usually wholesale the deal to a wholesale buyer, usually another real estate investor.

Once you identify a cheap house, you sign a contract to buy the property. Little earnest money is needed for this, usually $100 to $500 or even less.

You then take the contract to the real estate attorney or title company to do title work.

As title work takes place, you get a buyer, usually another real estate investor. Depending on potential profit at hand, you then sign a second contract to flip the deal to your real estate investor wholesale buyer.

You do sign an assignment of contract where you assign the contract to a buyer. In this case the property is bought by the wholesale buyer on your behalf. In other words, the real estate investor gains the right to buy on your behalf.

In general, you do an assignment of contract when you do not have a lot of money to make. The wholesale buyer will find out how much money you make in the deal.

You can also do a simultaneous closing, or double closing, where you buy the property then flip it to a real estate investor buyer. The contract you sign is a contract where you buy the house, then another one where you sell.

So in this case, you do two transactions, one where you buy and one where you sell. Your wholesale buyer will not find out how much you earn in the transaction because you sell the property directly to him.

Simultaneous closing is better where you stand to make more money in the deal so you do not want the real estate investor wholesale buyer to find out.

You probably just need earnest money to close such a transaction.

2)Only a little work input is needed When flipping houses, you do not have to rehab houses, the wholesale buyer does. All you have to do is get cheap houses, then wholesale them to wholesale buyers.

3)You get your money quickly In general, it takes 3 to 4 weeks or sooner to get paid in a wholesale deal. S long as the title work is all done and the deal is funded, you can close it.

4)No hassles for management You do not need to worry about bad tenants since you never hold houses. You do not have to worry about rehab because your real estate investor wholesale buyer is the one that does repairs, not you.

Ultimately, you will get a healthy cash flow as a real estate investor flipping.

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