Over the past few years, you and I have been beaten up on TV with real estate flipping shows depicting these folks flipping houses at outrageous profits and making it seem so much easier.
So, is this flip stuff real? Um… definitely yes. There are countless people who have turned their homes upside down and are living a very good life. But… TV shows about flipping are deceptive when it comes to the “reality” ofReal Estate Broker Mississauga flipping.
Is real estate flipping the best way to start investing in real estate? Let’s decide for ourselves. But in my opinion, for most people, especially in today’s downturn market (not all markets are down… in fact, some are doing really well), real estate flipping isn’t the best way to start investing in real estate.Here’s why.
First, let’s clarify the two kinds of flipping. The Fix and Flip – A place to buy, rebuild and sell properties to retail buyers. It’s the kind you see on TV shows. The Wholesale Flip – A place to buy (or buy under contracts) real estate, find wholesale buyers and flip contracts. Less glorious… but the kind with a lot of money in it… with a lot less risk. To me, the Fix and Flip method isn’t for most beginners… though it’s real estate investing you see all the time on TV.
You need to understand rehabilitation costs You need to have enough funds… Private Lender or Bank (preferably a private lender) You need to be able to fluctuate your hauling costs if you can’t sell the property quickly.
If you don’t calculate the cost properly… there may not be much room for error… room for error means more risk!
The market is in a downturn… so there are fewer retail buyers for middle class homes… that’s what most people are starting out with. There are a lot of people who make a very good living… but most of them started years ago… and have a lot of flips under their belts.
They already have their systems down, they have marketing channels to acquire buyers, and they have solid sources of loans. Not to mention that new real estate investors can’t do all of the above… you can!
However, there is a better way to start investing in real estate with little to no risk or money and learn the fix and flip business before investing a ton of money.
What’s the best way (in my opinion) to start flipping real estate to minimize risk and shorten the learning curve? Um… obviously option #2 above: The Wholesale Flip – or in other words… wholesale real estate, flip houses for quick cash, flip contracts, etc.
It does everything flippers normally do when wholesale properties… except actually repairing properties and selling them to retail buyers. But without the risk or time commitment that fixes and flippers have.
