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Old 01-04-2008, 09:20 AM
"Super Star"
Default United Built Homes, Flipping Real Estate or Flipping Paper?

United Built Homes, Flipping Real Estate or Flipping Paper?

Flipping real estate properties is not for everybody but it is the
fastest way to make a buck in the real estate business. Most everybody
has heard of someone buying a "run down" house for a good price well
below market value, fixing it up and selling it at a fair market price.
Flipping a "fixer-upper" is definitely one way to turn a reasonably
quick profit. I know some people who do it this way but they are more
into the contractor and renovation business than they are of the
investor mindset.

Some of these "fixer-upper" properties are in need of extensive repair
and will involve electrical work, carpentry work, etc. If the investor
gets involved and does some or all of this work then there could be
enough profit there but if the investor farms out the required labour,
profits could get eaten up quickly. For these types of flipping real
estate investments, the purchase price needs to be at a huge discount
and normally would be found somewhere in the foreclosure stage.

For the person that is in the mindset of investing rather than being in
the renovation business then flipping real estate will only involve
flipping the paper contract of the property without even taking
possession of it. You can flip by entering an agreement to buy a
property then sell the contract to another investor before close of

Using this technique won't even require you to put your name on the
title. Profits will generally be less than the fixer-upper investor but
involves much less work and the whole process is much quicker. A
fixer-upper investor would not be happy in making a profit of a few
thousand dollars for a few months work on renovations but an investor
that can just flip a contract for a few hours or days work would be.

Avoid disclosure of your profits to the new buyer by using a double
closing. After making a sweet deal and flipping a contract involving a
juicy profit you may not want all these details to be revealed to your
buyer. The solution is a double closing, transferring the property to
you initially and then reselling immediately at the same lawyer's
office just an hour later to your buyer.

There is a drawback here and that is a double set of closing costs so
you would have to weigh it out to see if it's worth it to your
particular situation or not. Further, you can use a title insurance
company for the actual closings. For the issuance of the title
insurance policy, the title insurance company will prepare the closing
documents and close the transaction usually without an addition charge.

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