The Flip is Dead: New Rules of Real Estate Investing

No More Flipping Houses? Are Real Estate Investors going back to the fundamental Buy-and-Hold strategy?

The real estate market is still dominated by foreclosures, pre-foreclosures and other distressed properties, and as opportunistic investors, we can’t ignore short sales, foreclosures, and defaulted note buying.  One thing seems to have changed and that topic is about flipping houses for a quick profit. Whereas the preferred exit strategy used to be flipping a property or note for a quick profit, that strategy no longer works in many cases, due partly to new federal rules such as HAFA and HAMP, restrictions on same-day transactions, seasoning requirements, and general market factors.

Cash(flow) is King Again

However, there are other reasons that aggressive investors are looking beyond the quick flip–and that’s because buy-and-hold returns are so good right now.  All of a sudden, investing for cash flow never looked so good. (Robert Kiosaki is smiling and nodding…)

Like everything, the current situation creates new winners and losers. The real winners seem to be well-capitalized investors who can pounce on these distressed properties–either by buying at auction, buying REOs, or by acquiring non-performing notes with the intent of getting access to the underlying assets. (This last strategy, a favorite among hedge funds, is probably the least understood method of picking up distressed real estate, and we’ll go deeper into in a future article.)

The losers may be individual investors who know the local market well but who either don’t have ready investment capital or who can’t let their cash get tied up for months or years in a buy-and-hold scenario. Solutions for these investors may involve teaming up with private investors as “bird-doggers” or partners. Plus, it’s an exaggeration to say that house-flipping is absolutely dead. It’s not. It’s just getting harder and harder, and the returns often aren’t as good as they were in 2008 and 2009.

What do you see happening out there? Are you still able to flip houses profitably?  Or is the Flip dead as a viable Real Estate investing strategy? Add your comment to the pile below…

You can read the article from it’s original source at The House Flip is Dead!

Flipping houses videos that may interest all of you real estate bird dogs.

Flipping Houses Not Always Profitable Money Tuneup Real

Flipping houses on TV looks fun but is it actually profitable Well One expert breaks it down for us.…

Flip Houses Successfully Even in This Market savingtools.com

Over the last few years house flipping has become a source of instant curiosity for many people. The process involves purchasing a home for a fraction of what it is worth then fixing it up and selling it to make a profit. How does house-flipping.…

In general, the term “flipping houses” just means buying a property and then reselling it in a quick time period (from a few weeks to a couple of months).

House flipping mostly refers to the skill of buying and selling properties as a money making strategy to make a quick profit.  Because it involves buying a property this is not something that a Real Estate Bird Dog would do until they have learned a lot, plus the risk is higher.

A variant of flipping houses is rehabbing.  This involves purchasing a property that requires some work, then fixing it up for the resale. This involves even more risk because you need to know how to estimate repairs AND get the work done quickly so you don’t have to make a lot of loan payments etc. while you are holding the property.

You could sell the property at a discount to another investor, or place it on the retail market for someone to purchase as a home. This method offers higher profit potentials. You could earn anywhere from $20 to $100,000 on a single property depending on your market, how good you are at finding a bargain, and how well you manage repairs done to the property while controlling your costs.

However, flipping or rehabbing houses is a lot riskier than just locating the properties for investors. You take a bigger risk because you have to put up your personal money to take control of the property and title. You will often have to put up an earnest money deposit to secure the deal. With retailing, you will have to put up your own money to cover involved repair costs and carrying costs to cover the mortgage payments, taxes, and insurance. Other risks for retailers involve losing money on the deal because you’re either paying too much for the property or you underestimated repair and/or holding costs. So be careful and conservative.

Once you become comfortable with locating properties and referring them to investors, it may be time for you to move on to the next level of real estate investing. This next stage is where you personally take control of the property and then re-sell it to an investor or consumer. No longer a Real Estate Bird Dogger, you are now a Wholesaler. Read the rest of this entry

I have been in the business of Real Estate Wholesaling for over two decades and have met many people who refer to themselves as professional wholesalers. They flip houses for a living, but that is all they do. They use various means to locate a house and then their determination of the value is usually wrong. I have many of them call me and ask if I have a buyer for the property. In almost every case, they want to split their assignment fee for me to provide an investor. They rarely have a data-base of investors to buy their contract. Of course this will cost you a considerable part of your assignment fee. Read the rest of this entry

To start your Property Locating venture off correctly you need to realize the progression that you can go through as you gain more experience as a Real Estate Bird Dog.

There are three graduated levels of Bird Dogging:

1. Locating -

These Bird Dogs search for and find properties, providing investors with basic property information.  For example, an investor may want the addresses of all vacant, single family homes in a given area. Read the rest of this entry

There are some easy ways to get rich. Flipping real estate is a popular way to get rich. It’s very easy to handle. You simply buy an inexpensive home, make improvements and then sell it fast for more than you paid for it. In other aspects, flipping houses is not an easy way to control because flipping houses has many connotations. Investors buy a property, rehab and renovate and then sell for a tidy profit. This requires a lot of work.

There are house finders also known as wholesalers, flippers or bird dogs that find good deals, get the property tied up and under contract, and then find and assign the contract to the actual buyer for a fee. This process is known as assigning a contract, and requires some skills to handle it appropriately. Now let me introduce you some skills about assigning a real estate contract. Read the rest of this entry