Several
real estate
investing newsletter readers emailed me
wanting to know...
Is it too
late to make money flipping houses?
Concerns over rising
interest rates and the real estate market change
from a sellers' market to a buyers' market scare
beginning real estate investors. A sellers' market
exists when sellers have the upper hand with
little competition from other houses for sale.
When more houses are for sale than buyers making
offers, a buyers' market means that prices could
drop.
Investors who make money flipping houses don't
need to depend on appreciation because they get in
and out of the property quickly. These investors
buy houses at a deep discount from sellers under
stress to sell and then resell the house to a
buyer who wants to live in the house who's willing
to pay full value. Rising interest rates don't
make too much difference because the investor
don't keep the mortgage.
Wealthy real estate investors have been making
money flipping houses in both sellers' and buyers'
markets. Just like any type of business, some
investors misjudge an investment and lose money,
even during the best market conditions. The
difference between the winners and losers, besides
experience, is knowledge. Here are three areas you
need to know to ensure your success as a real
estate investor.
First, you need to know your local economy.
You must know the economic outlook in your area.
Follow employment trends and population
statistics. Are more people moving in than moving
out of town? Because people always need housing,
invest in an area with a good rental market. If
you find too many vacancies in a neighborhood,
that means you should discount any offer or look
elsewhere.
Second, you need to know your market.
Knowledge of the market helps you know a bargain
house when you spot one. Look at many houses for
sale in your area. Keep track of sales and how
long the houses take to sell. Ask selling real
estate agents about the terms of these sales
because this helps you understand how sellers
market their property. (Some of this information
is public record). For instance, if a seller paid
closing costs for the buyer, did the price rise
from the listed price accordingly? Or, did the
seller come down on the price and also pay the
buyer's costs?
Examine the sales that sell quickly. What home
features and financing options prompted the fast
sale?
Third, you need to know about houses.
What makes one property more attractive to home
buyers? You wouldn't want to buy a home with a
terrible defect like a horrible floor plan, a
noisy freeway in the back yard, or structural
flaws. The best way to learn about houses is to
preview many houses for sale.
When you learn about your local real estate
market, local economy, and property conditions,
you empower yourself to make wise investing
decisions.
Aristotle Onassis said, "The secret of business is
to know something nobody else knows." Dig deep in
your local market and find the bargain house to
flip.
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Copyright © 2007 Jeanette J. Fisher
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