Learning how to flip foreclosures is every bit an on-the-job learning experience, if not more, than the education you would receive in a typical foreclosure boot camp training class.
People have this misconception that flipping foreclosures is easy money, and that you can make a million dollars overnight. While it is true that you can millions of real estate in a relatively short time span, it is definitely not as easy as the gurus make it sound.
Investing in real estate is a complex business. There are so many aspects to understanding just how to flip foreclosures. There is the legal aspect of it; you need to understand foreclosure law, mortgage law, bankruptcy law, real estate ownership and transfer laws, building codes, and the laws pertaining to renting. There is the financial aspect; you need to understand how mortgages work, you need to know how to negotiate with mortgage companies. There is the rehabbing aspect; you need to know how to estimate the costs of repairs to a house and you need to know how to renovate a house, whether or not you will be doing the work yourself or outsourcing it. You need to understand the real estate appraisal process. You need to know how to research foreclosures to find the ones worth investing in versus the ones that are not good deals. You also need to know how to negotiate with homeowners.
How to flip foreclosures is fundamentally a 5-step process:
1. Research foreclosure leads and weed out the good ones from the bad.
2. Contact the owner of the house or the mortgage holder, depending on whether you are buying the property during the preforeclosure stage or after the house has already been repossessed to negotiate a sale and get the house under contract.
3. Obtain funding for the deal by either obtaining your own financing or forming a partnership with a money partner, and then fund the deal.
4. Renovate the house.
5. Rent the property out or put it on the market to resell it either by owner or through a real estate agent.
Whether the housing market is experiencing a boom or a decline, there is money to be made. When real estate is hot, you can expect to flip properties fairly quickly and pocket a decent amount of cash, anywhere from $5,000 to $30,000 or even more per deal, depending on the specific deal and the market you are in. When the housing market is in a decline, you can put the property up for rent to cover your mortgage and possibly earn some positive cash flow, and then flip the property when the housing market picks up again and the house has gained sufficient equity.
Tag-Archive for ◊ Real Estate Agent ◊
There are many people seeking new careers due to their recent job loss. While many see the housing market in shambles and run the other way, they aren’t really seeing the whole picture. Getting a real estate license right now is actually a good career move because you can guarantee that if you are willing to put for the effort, you will always have work. No matter what state you live in, a real estate license is required to practice as a broker or real estate agent. You have to be 18 years of age, have a high school diploma or GED, and pass a license exam once you have taken the necessary classes. While some states require these courses, others just need you to pass the test which means that the education is up to you.
Testing and education for a real estate license is required because the laws and regulations can be complicated and confusing, so states need to make sure that people really understand what they’re doing. It’s not a job that you can just pick up with no experience like being a cashier or a cleaning person. You have to learn the laws and rules of real estate in order to be successful and do your job right. Each state has two levels of licensing, which gives people the choice of what they want to achieve.
A real estate agent will either be licensed as a salesperson or a broker. The broker will be able to act on behalf of the client and work completely independent from anyone else. This is the higher level of training. For those who want to get into this career but don’t want to invest into this level of training, they can choose to be a salesperson instead. This person is licensed as a realtor, but can only operate with the supervision of the broker. That means that they can help people buy and sell houses, but they must always report back to the broker in order to get the deals closed and ensure that they do everything by the book.
Each state administers real estate license tests on their own. The name of the test varies from one state to the next, as do the requirements for testing and licensing. Make sure that you contact or visit your state agency that does license testing to find out exactly what you need to do to qualify for the test and become licensed as a real estate agent.