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Flipping houses has become a popular method of real estate investment intended for short term gains. In many cases, flipping houses entails transforming a run down property, working on it as needed, and then reselling it for a profit. This manner of flipping houses in only one side of the resale story of real estate.

The other, lesser known aspect to flipping houses is considered “quick flipping” or “wholesaling”, a model based on contract assignments.  This process involves a wholesaler finding great deals, getting them under contract, and then “flipping” the contract to an end buyer, which is typically a fix and flip investor.

Quick flipping is not as well known as the types of real estate investing seen on popular television programs, as contract negotiations don’t make for exciting TV.  However, quick flipping can make exciting income opportunities from contract assignment fees.

The key to success in both scenarios of fix and flip and wholesaling is to find deeply discounted properties. In these cases, foreclosures and pre-foreclosures can be valuable short term investments.

There are several different types of foreclosures, and understanding each type is helpful when making decisions to purchase a property for wholesale or fix and flip.  Each type comes with its own set of considerations, which are necessary to take into account in order to avoid any investment pitfalls.

Most people know of bank-owned properties or REO foreclosures as these properties are primarily the ones in the public view.  These are properties that lenders have repossessed due to failure to pay and non payment of a mortgage. Lenders take possession of the delinquent property, and then offer it up for sale through a variety of channels.

There are also tax foreclosures that happen as a result of a homeowner failing to pay their property taxes.  Taxes can go unpaid for any number of reasons, and if they do, the taxing authorities can foreclose to recoup the tax revenue.

Foreclosures can offer great deals, and also great pitfalls.  Understanding how the systems work is imperative to making a clean and profitable purchase. Courthouse auctions differ from tax auctions, and bank foreclosures operate differently as well. Working with a trusted real estate professional, and securing your funding through experienced lenders such as Hard Money Man LLC, can help you make sound choices that give you positive return on your investment.

There is money to be made in short term real estate investing.  Considering purchases of foreclosed properties can prove to provide positive return on your investment.