by: Simon Macharia
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Date: Tue, 18 May 2010 Time: 4:06 AM -
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The easiest way to make quick profits as a real estate investor is flipping houses, which is also called wholesaling houses. Very little to no cash is needed as capital investment when wholesaling houses.
Article Source: DirectoryArticles.com
To avoid failing in real estate investing flipping houses, here are things you must avoid when flipping houses.
1) Do not invest in questionable neighborhoods
Few people or real estate investors choose to buy houses in risky neighborhoods. Keep away from buying in these areas if you want to sell your houses fast and easy.
Look for medium income nice neighborhoods that are attractive, yet inexpensive.
2) Do not miss the opportunity for an inspection
You must perform an inform inspection. Pay particular attention to exterior appearance of the house, since this is the first thing a buyer sees. This is important.
3) Do not miss to work with conservative comparable sales
The more conservative you are at estimating fair market value when you buy, the less likely you are to make a high offer that leaves no cash for you or your real estate investor buyer that you wholesale the house to.
4) Do not fail to be generous with repair estimates
He repair estimates you make directly affect the potential profit you or your real estate investor buyer makes when you sell your houses. Never get conservative with repair estimates or you could buy high.
5) Never fail to buy low
Even though this sounds obvious, most real estate investors make this mistake. Of course you have your numbers right; you know the conservative market value, generous repair estimates and potential equity before you buy.
Your potential profit must be calculated into the offer you make. This protects you from making generous offers. I by no means shy away from letting the seller know that even though my profit might seem high to him, I must give a big discount when I sell my houses to sell them fast.
This works like magic in a buyers market.
6) Do not spend beyond your projections
In flipping houses, the goal is not to do any repairs, but to pass this on to the wholesale real estate investor buyer.
Occasionally, you may find it crucial to do some light fixing up, such as hauling off trash cleaning up the yard, or such light tasks that make the house more visually appealing for sale.
Even though the goal is to flip the house to another real estate investor, at times it is essential to fix minor jobs that could blow up estimated repair costs that could eat up into your profits.
Stick to a tight budget. The more you spend, the less you make.
7) Do not keep all the profits to yourself
Every real estate intends to make a profit when they buy any house. When you do your math, you have to take into consideration the fact that you have to make a profit, and the real estate investor you sell to must make his profit too.
As long as you leave room to make money for you and your real estate investor buyer, you will flip houses successfully.
By sticking to these rules, your success as a wholesale real estate investor is assured.
Simon Macharia buys and sells houses in Dallas TX. He particularly likes to flip houses, running and automating his business through his real estate investor website
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