The Real Estate Bubble Aftermath

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The Real Estate Bubble Aftermath

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The End Of The Real Estate Bubble - What Does It Mean To You

Jeanette Joy Fisher

Last spring, I was invited to go to Philadelphia and participate in a "real estate bubble" discussion on Ch 8's "Money Matters Today".

Television reporters, newspapers, and media hype love scaring you to grab your attention. On the TV show, I defended the real estate market.

What's behind all this bubble talk?

Before you give any substance to warnings about a "real estate bubble", look closely at the source.

Many stock brokers jump on the bandwagon of real estate doom to get investors back into the stock market. Also, many negative reports originate from mortgage lenders who want to keep the mortgage insurance rates high and keep the insurance premiums coming in for loans on houses that have appreciated.

So, What Happened To The Real Estate Bubble?

I can't speak for all real estate investors. If my family had been scared into discounting our investments, selling out, and not buying more property in 2005, we would have lost a million dollars.

We bought and held houses.

All of our property increased by 20% - 35% and the ones we fixed increased in value even more.

In particular, for one home we paid $120,000 and spent $10,000 in repairs - within the year it appraised for $325,000.

Who profits from the real estate bubble?

Besides media scaremongers, mortgage insurance providers, and stock brokers, real estate investors make even more money. What's that? How do real estate investors make money from the real estate bubble? They take advantage of desperate home sellers scared by the media.

In January 2006, we bought an investment property that the home seller, in the midst of a divorce, discounted for a quick sale. The $340,000 property appraised for fifty thousand more than the purchase price.

Now, we could quick sale the property for fast cash, but we're in for the long haul.

The property has great development potential.

So, we'll let the tenants pay for the mortgage and maybe tear the small house down in a few years. A half acre, one lot away from a future marina near new condos, has many possibilities.

Keep the bubble talk. People always need housing.

The more you hear about the pending burst, the more money real estate investors CAN make.

Copyright © 2006 Jeanette J. Fisher

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About the author:  Jeanette J. Fisher

Jeanette offers a FREE "How to Start Real Estate Investing" teleseminar and a free ebook, "The Truth about Making Money Flipping Houses"

Visit www.doghousetodollhousefordollars.com

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Exposed! The Real Estate Wholesale Quick-Turn Flipping Deal

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Exposed! The Real Estate Wholesale Quick-Turn Flipping Deal

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Alain Diza

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Wholesale real estate investing (i.e. "quick-turn" or "flipping" real estate property) is conceptually very simple. Here's how it works:

First, "Investor A" finds a great real estate deal with a lot of equity.

Typically, Investor A will have spent a significant amount of time, money, and expertise to find the deal, negotiate the terms, and get the property under contract. By putting the property under contract, Investor A now has control of the property, and the equity in the property.

(For this example, imagine that Investor A has found a property worth $200,000 and has set a purchase price of $115,000 and he also knows that there are $15,000 in repairs, which leaves an equity position of $70,000).

Second,"Investor A" finds another party, "Investor B".

Investor B recognizes that the contract that Investor A has established is worth $70,000 in equity, and so he strikes a deal with Investor A to turn the deal over to Investor B in exchange for some amount of cash, called an "assignment fee" (we'll use the value of $12,000 in this example).

So Investor A is giving up $70,000 in "potential" profit in exchange for $12,000 in current profit. And Investor B is paying $12,000 because he believes he can make more than that on the deal, since there's a full $70,000 of equity built in.

This deal between Investor A and Investor B is called an "Assignment", because Investor A is assigning the contract to Investor B.

Third, Investor B does his "due diligence"

Due diligence in this case consists of inspections, appraisals, etc. to confirm that the deal is as good as he/she thinks it is.

Finally, at closing, Investor B closes the purchase of the property.

At this point, upon closing or completion, Investor A receives the assignment fee from Investor B.

This is obviously, a simplification of the process. But this is essentially how the "quick-turn", real estate flip deal works - not so difficult now, is it?

Now, get out there and hunt them deals down!

What? Not sure where or how? I can show you 3 quick sources to get you started right away...

About the Author

Alain Diza makes it easy to understand the mechanics of the real estate wholesale quick-turn flip. Learn this principle and private strategies the 'gurus' are charging thousands for. Get your free e-course at: Free Course

Return From Make Money Flippiong Property To Flipping Real Estate Or go to Freedom Steps With Property Investing

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Make Money Flipping Property

Copyright © Jeanette J. Fisher

Would You Like to Make Money Flipping property?

Many beginning real estate investors get started by flipping real estate to make quick cash.

If you would like to make more money by investing in real estate, you need to know a few essentials.

A Simple Definition of Flipping

Buying property and reselling quickly, hopefully for a large profit. Usually, people think of flipping houses, or the buying and selling of a home fast, as the only way to make money flipping real estate. However, some investors specialize in other types of real estate such as land or strip centers.

Some confusion arises over the process of making money flipping property.

People who specialize in finding bargain real estate, obtain a purchase contract, and then sell the contract before taking title to the property are known as Bird Dogs.

These beginning real estate investors get started with no money down by:

• Finding a seller under stress with a bargain property
  
• Securing a sales contract
  
• Selling their contract for roughly $500 to $5,000 to a seasoned real estate investor
  

Isn't real estate flipping illegal?

Flipping real estate isn't illegal. However, many unscrupulous investors committed mortgage fraud to make fast money.

Some of these investors, working with mortgage brokers and appraisers, resold houses to unqualified buyers inflating the property value and home buyer's qualifications. Often these home purchasers had no money or little money down.

When these new home owners defaulted on the mortgage payment, the mortgage lenders lost money because the house wasn't worth the inflated purchase price.

To avoid legal problems in real estate flipping, don't commit mortgage fraud.

To Make Money Real Estate Flipping

1. Prepare your financing so you can close on a deal quickly.
   
2. Learn your market so you know what makes a good deal.
   
3. Find a bargain property owned by a seller under stress to sell.
   
4. Secure a purchase contract in your favor.
   
5. During escrow, plan your selling actions.
   
6. Close on the property on time.
   
7. Immediately set your selling plan into action. If the property needs fixing, be prepared to get this done right away.
   
8. Market your property to your target market. Don't just list the property and hope for the best.
   
9. Find a qualified buyer. Have a loan officer check to make sure your buyer meets all the mortgage requirements.
   
10. Stay legal. Don't use an inflated appraisal. Don't help your buyer create false W2s, write phony credit letters, or prepare any false documents. You can pay many of your buyer's closing costs to make the purchase easier.
    

Buy low, sell for full-market value, avoid mortgage fraud, and enjoy your profits!

You can make money Flipping property.

Buy low, sell for full-market value, avoid mortgage fraud, and enjoy your profits! See the article on
Equity Discount Property Investing -- to discover how you can increase your net worth by $20,000 to $100,000 on every deal that you do.

About the author: Jeanette J. Fisher

Jeanette teaches beginning real estate investors how to find, finance, fix, and sell houses for top dollar.

To find out how to make more money using interior design and get a free ebook on Flipping Houses, see: www.doghousetodollhousefordollars.com.

Return from Make Money Flippiong Property To Flipping Real Estate Or to Freedom Steps With Property Investing

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Understanding Your Costs To Help You Calculate Profits Flipping Real Estate.

Calculate Profits Flipping Real Estate

By Heather Seitz

If you've been in the real estate investing business, or more specifically been flipping real estate, for more than a few days, you've inevitably gotten an email that reads something like this:

"Investor's Dream. This property will go QUICK." Property Address: 1234 Main Street Asking Price: $100,000 (Add or subtract zeros!) Value After Repair: $150,000 Less cost of Repairs: $15,000 Profit: $35,000 Details: Needs paint, carpet, tile, new kitchen, update bathroom, some roof damage. Tenant occupied. Need to evict!" STOP! Before you read on... Take a guess at what you think the "real" profit's going to be on this real estate investment...

If you haven't ever gotten an email or fax broadcast like this, then rest assured, you will! I'm about to probably tick off all of the late night infomercials and pitchmen out there!

Sure, I understand that when you've got 30 minutes (or 90 minutes, for that matter), that you've got to sell what's sexy... not what's real!

Now it's my turn to expose the real deal on real estate investing!

This goes for flipping real estate itself (i.e. properties) or simply flipping the contract (also known as assigning the contract).

When you're flipping real estate, you need to be able to calculate the real bottom line and if you're assigning the contract, you need to know your numbers so you don't get blacklisted from investors!

This one piece of information will keep you from getting into trouble because of any "real estate bubble"!

Purchase Costs

Here goes... Have you EVER purchased and sold a piece of real estate for FREE?

If you're not sure what the answer is... It's an emphatic NO...

You are going to have costs to buy, costs to hold and costs to sell. This holds true even if you are buying a property for all cash. (Think title fees, attorney's fees, recording fees, etc.)

If you're not getting a mortgage, your purchase costs are obviously much lower, but nonetheless, there are costs associated with any real estate transaction. Plus, more than likely, if you're relatively new, you're probably not paying all cash for property anyways. You're probably going to be using a hard money investor for your initial real estate investing financing!

For a quick calculation, you can estimate anywhere between 3% - 5% for closing costs to just acquire the property. That's 3%-5% of the purchase price.

Holding Costs

How much is it going to cost you each and every day to own this piece of real estate?

See, if you're making money in real estate, you'd better believe that there are a lot of other people that are going to expect to get paid and they get paid in the form of mortgage interest, property taxes, utilities, property insurance, etc. Each of these is an expense each and every day that you own the property.

Here's an example...A hard money loan on a bread and butter type piece of real estate might run you 15%.

Let's say you got the property for $100,000.

Every month, you are paying $1250 in interest alone.

Let's say that taxes and insurance are another $200/month and then utilities at $100.

Right there, the property is costing you $1550/month - or roughly $50/day.

See, why it's important to know your not only your holding costs on a real estate investment, but also how long it's going to be on the market before you can flip the property.

Selling Costs

Here's the third part of the real estate investing puzzle.

When you want to turn around and sell this piece of real estate, it's going to cost you yet again!

Are you going to use a real estate agent and pay a commission or 3-4-5% or even more? On $150,000, that's anywhere from $4500 to $7500 chopped of the top. Then, you can figure 1-2% in closing fees.

If you can remember this... and apply what you've just learned to each and every real estate deal that you do, you'll be safe flipping real estate in any market.

You see, if it's a hot market, you can calculate less time for holding cost. But, in a slower market, make your offer based on 6 months or 9 months of holding costs. It's really simple math! And real estate really is a numbers game...

Recommended Resources:

Finding Deals: www.motivatedsellermarketing.com Estimating Repairs: www.fixingandflipping.com Finding Contractors: www.servicemagic.com

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About the author:Heather Seitz

Heather is the co-creator of Fixing and Flipping software. It takes the guesswork out of estimating repairs.

Learn how to estimate repairs and calculate profits in seconds. Click below for your free video and mini-course: www.fixingandflipping.com

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Return From Calculate Profits Flipping To Flipping Real Estate  Or go to Freedom Steps With Property Investing

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