| Though "flipping" real estate has become a | | | | learns what is going on, there could be |
| popular practice, it is also pretty | | | | trouble. The seller, aware that the flipper |
| controversial. This is mainly because people | | | | is in dire straits, will probably up his |
| have gotten into it without considering the | | | | price. The seller now knows the buyer is |
| ramifications of their actions and, | | | | expecting that property. It is even possible |
| consequently, engage in some very bad | | | | that the flipper has sold the property to the |
| practices. The clumsy flipper can anger both | | | | buyer and is then turned down by the seller. |
| the buyer and the seller-not to mention get | | | | This puts the flipper in the position of |
| themselves into some very awkward and costly | | | | having just sold something he can't deliver. |
| situations-by flipping real estate. However, | | | | |
| that doesn't mean it can't be done. | | | | According to Ken McElroy, author of "The ABCs |
| | | | of Real Estate Investing," there are, |
| Flipping is simply the quick selling of a | | | | however, companies that flip very |
| property that one has just purchased. The | | | | successfully. This is because they follow a |
| sale may take place that very day, or even at | | | | few simple rules, such as never selling |
| that very closing. The idea behind this | | | | something they haven't actually purchased. On |
| practice is, if a property appreciates and | | | | the surface, that sounds like such a basic |
| I'm just going to turn around and resell it | | | | idea, it is not necessary to mention it. |
| at a profit anyway, why wait? Why not buy up | | | | However, you would be surprised if you knew |
| a whole bunch of properties, sell them | | | | the number of people who try to get away with |
| quickly and make a ton of money? | | | | not following this simple rule. |
| | | | |
| See the allure? It can be done, but it is a | | | | The companies who flip will resell a property |
| tricky business. You cannot be a successful | | | | that very day if at all possible, but they |
| flipper without using some finesse. For | | | | don't sell at the very closing where they |
| instance, many people think they are being | | | | purchased the property. Instead, thy use |
| hugely clever by working the seller and the | | | | mailing lists they have built over time to |
| buyer against each other. The flipper, who | | | | send out bulletins that they have a property |
| sets himself up as a middleman without the | | | | for sale. It can cost hundreds of dollars to |
| knowledge of either party, actually gets the | | | | get the word out and arrange meetings. It can |
| seller to agree to sell to him, then runs to | | | | also require an entire staff to do it quickly |
| the buyer for the cash, from which he pays | | | | enough to make it pay off. |
| the seller. Using this method, he makes the | | | | |
| purchase without even using any of his own | | | | Because of those particular limitations, it |
| cash. Afterward, he simply pockets the | | | | is often not lucrative for an individual to |
| difference. | | | | attempt flipping properties, although, |
| | | | conceivably, a particularly savvy individual |
| But if he has sold a property to the buyer | | | | could indeed make it pay off. The question |
| that isn't actually his, and the seller | | | | is, is it a good approach for you? |