| If you have spent any time online in recent | | | | quarters flipping has developed a proverbial |
| years or if you read newspapers or watch | | | | bad name in recent times due to people who |
| television with any degree of regularity you | | | | have engaged in illegal practices. In these |
| likely have heard of flipping properties. | | | | cases, bad operators will in fact purchase |
| You may have heard some stories of | | | | distressed properties. However, rather than |
| individuals who have made money through real | | | | actually improve the property, the typical |
| estate flipping. With all of this said, you | | | | bad player will align his or her self with an |
| may have heard at least something about | | | | equally unprofessional appraiser. The |
| flipping, but you may not know what real | | | | appraiser and the property owner scheme |
| estate flipping is all about. You may be | | | | together to inflate the valuation of the |
| wondering if it's is right for you. | | | | property. The buyer then sells it to a new |
| | | | buyer for an improperly (indeed, illegally) |
| First of all, in essential terms, flipping is | | | | inflated price. The seller and the appraiser |
| a process through which an investor purchases | | | | will work out some deal to split the proceeds |
| distressed real estate at a price that is | | | | from the scheme. Again, this is a wholly |
| below the going market rate. After making | | | | illegal process. |
| the purchase at a distressed cost, the buyer | | | | |
| will then generally work to rehabilitate and | | | | The bottom line is that you should not |
| renovate the property. With these | | | | involve yourself in flipping unless you |
| improvements, the buyer is then able to sell | | | | really do have some expertise in real estate |
| the home to a new purchaser for a higher | | | | investment and Florida real estate laws. |
| price. If the investor pays attention to the | | | | When all is said and done, flipping really is |
| bottom line, he or she normally can make a | | | | not something that effectively can be done by |
| nice profit on their efforts. | | | | a complete novice. |
| | | | |
| Examples of real estate that is considered | | | | Moreover, you need to keep in mind that there |
| distressed and suitable for purchase in a | | | | are risks involved that are not evident in |
| flipping process includes property in | | | | other types of real estate investment. The |
| foreclosure, in a pre-forclosure process, | | | | most significant risks center around the |
| bank owned property (REO), being sold at a | | | | whole process of purchasing homes for a price |
| tax sale, property involved in a probate or | | | | below the market rate and then be able to |
| estate case, property involved in a divorce | | | | rehab the home without putting too much money |
| action or homes that is not in good physical | | | | into the process so that it can be resold at |
| condition. | | | | a rate that allows for a profit to be |
| | | | generated. In some instances, there can be a |
| You need to keep in mind that in some | | | | very fine line between success and failure. |