Real Estate Investing Facts

You’re very familiar with the term “flipping” by now.

Just a quick recap: Flipping properties involves buying a piece of real estate and then reselling it at a profit. Flipping is all over the television these days thanks to various cable shows and has long been one of the most tried-and-true ways for an investor to make money.

However, I’ve come across so many wannabe investors, those who are just getting into flipping houses, maybe with one or two flips on their scorecard, and one question they always seem to ask me is: How do you know it’s time to turn your flip into cash?

The cable shows break the entire flipping process into a neat thirty or sixty minute show. But do you know if there is an ideal length of time that you should hold onto your property before putting it back on the market?

The answer to this question is a qualified “it depends”.

If you’re buying a brand new house, you may actually discover that the builder has a clause in the contract that says you MUST hang on to the home for a specific amount of time, often one year.

But with most pre-owned homes, there isn’t such a clause, and you’re generally free to sell the home as quickly as you can find a buyer and make a profit.

However, the rule of thumb for flipping houses seems to be three to six months, especially if you’re planning to make repairs or remodel a home for profit. According to specialists, selling before or after that time will normally result in less than a maximum return on your investment.

A flipper-type investor wants to find their property quickly.

The flipper finds their property and gets right to it. They make
whatever repairs may be necessary, and then get out as quickly as possible, with the goal of making money in the process.

In a recent study, it appears that investors who flipped properties averaged a 15 percent return on their initial investment.

However, investors who sold their properties between three and six months often were able to realize profits of as high as a 50 – 100 percent annualized appreciation rate.

That is a significant increase, and brings up the question as
to why the figures were so much higher.

The key seems to be that investors who can find under priced
properties in relatively brisk markets are able to make the necessary changes in the houses and then get what amounts to an immediate sale, which gave them a premium price that was some 20 -40 percent ahead of the market in their area.

In other words, they were working within markets that were booming, and were able to take advantage of that situation to reap greater profits.

The bottom line for you as an investor? Choose your area of investment carefully. Know your market, inside and out, join a site like the Foreclosure Insiders Club to gain insider access to properties that are in pre-foreclosure, negotiate hard, and then resell the property within three to six months if you’re hoping to make the maximum profit on your investment.

To Your Success!

Aiden Win

Mr. Foreclosure

Insider Access To Pre-Foreclosure Listings In BC And Alberta – UP TO 50% OFF!

P.S. Becoming a member of the Foreclosure Insiders Club is an
excellent way to keep tabs on properties in your area as they go
from pre-foreclosure status into foreclosure.

You’ll have an advantage over other investors and realtors in your area who don’t have access to this information and everything is conveniently delivered right to your computer!

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