The Basics Of Flipping Real Estate

Real estate is, let’s be honest, one of the only investments you can trust anymore. Sure, there are always ups and downs. A house you spend so much money on today might be worth half as much a year from now, but, it will eventually improve in value, and it will ALWAYS be worth something. That said, you still want to know how to make the most of your investment. Here are some of the basics when it comes to turning a home into a profit.

Buy Property Cheap

This one is obvious, but people often neglect this step, if you can believe it! A good example would be when Mel Gibson famously bought a mansion at the top of the market, and when he sold it a few years later, he barely made a five percent profit. This is not how money is made in real estate. The people who really make a mint doing this will buy up low income housing, they’ll buy beat up, worn down, torn up old houses, and then convert those homes and properties into something worth buying. You can’t turn much of a profit by buying at the top of the market. You have to see UNFULFILLED potential to really succeed in this field.

Sell it High

Another obvious step that many new investors just plain neglect! It’s ridiculous that so many real estate investors ignore these two crucial steps, as they are the basic concept of business: BUY LOW, SELL HIGH. You want to make as much profit as possible on each property you sell. This means that you can’t be content to, say, buy homes when the market is weak and sell when it’s strong. That’s profit, but it’s marginal. What you want to do is buy those beat up places you could have for a song, and then turn them into something that will sell well in ANY market. Take something of low value and turn it into something of high value. This is the core of smart business.

Control Your Repair Budget

The best way to go broke is to buy a beat up old house, and then spend half a million bringing in professional crews to rebuild the thing from the ground up. You’ll be lucky to break even. If this is your first property investment, try this: Buy the home and live in it for a year while you and your buddies fix it up. Your friends can work for “friend rates” or for a small but fair percentage of the profit. Control your budget and don’t go over, and you can turn a very small investment into a very large profit.

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