Real Estate Flipping – Is Flipping Real Estate the best way to start in real estate investing?
“Flip This House”, “Flip That House”, “Property Ladder”,… and on and on…
Over the past 2 years you and I have been hit hard on the television with real estate flipping shows that show you these people making outrageous profits flipping homes and making it look easier than heck.
Is this real?
Well… sure it is. There are many many people out there making a good living flipping homes. But… the tv shows on flipping are pretty darn deceiving when it comes to the reality of real estate flipping.
So, is flipping real estate the best way to get starting in real estate investing?
Well, you decide for yourself. In my opinion, for most people, especially in today’s down markets (not all markets are down… there are actually some doing really well), real estate flipping is not the best way to get started in real estate investing.
First, let me clarify two different kinds of flipping.
- The Fix and Flip – Where you buy real estate, rehab it, and sell it to a retail buyer.
- The Wholesale Flip
– Where you buy real estate (or get it under contract), find a wholesale buyer, and flip the contract.
In my opinion, The Fix and Flip method is not for most newbies… even though that is the kind of real estate investing you see on TV all of the time.
Why?
n Need a good understanding of rehab costs
n Need to have good funding… either from a private lender or a bank (private lender is preferable)
n Need to be able to float the carrying costs if you can’t sell the property quickly
n If you don’t calculate your costs right… there may not be a whole lot of room for error
n The market is in a downturn… so there are less retail buyers out there for middle income houses
Once again, yes, there are many people out there making a very good living flipping… but most of them started several years ago… and have many flips under their belts.
They already have a system down, have marketing channels for getting buyers, have solid lending sources, etc. Not to say that new real estate investors cannot do all of the above… YOU CAN!
But, there are better ways to get started in real estate investing that allow you to get in with little or no risk, little or no money, and will allow you to learn the Fix and Flip business before you ever take a huge money commitment to do so.
So, what is probably the single best way to get started in real estate flipping to minimize your risk and maximize your sleep at night?
Well… obviously option #2 from above: The Wholesale Flip – or in other words… wholesaling real estate, flipping houses for quick cash, flipping contracts, etc.
With wholesale real estate flipping you do everything a flipper would do… except actually repair the property and sell it to a retail buyer. But, you don’t have the risk or time commitment that a fix and flipper has.
In essence, you as a wholesale real estate flipper (or wholesaler for short), you find properties that need work that you can purchase at a large discount and sell immediately to a rehabber.
So, basically, you find the properties, analyze the numbers to determine the repairs needed, create an offer that enables both you and the rehabber that you will sell to to make a profit, and sell the contract to a rehabber who will actually make the repairs.
Most of the time you can actually place a property under contract for little to no money. Then, you turn around and market the property to rehabbers and make profit simply by being the deal maker.
Often times real estate investors will make between $2,000 and $20,000 on a wholesale deal. So, for a low to no risk way to get started in real estate… there are huge profits to be had.
Another great benefit of starting out doing wholesale real estate deals is that you learn the ropes of what it takes to be a rehabber. After analyzing several deals and talking to rehabbers to find out what they look for… you will have a good grasp on what a good deal is, how to accurately estimate repair costs, who the rehabbers use as contractors, etc. So, you are actually making money while you are getting a hands on education on real estate flipping and rehabbing.
Anyhow, I didn’t write this article to scare you from the fix and flip mindset. My motivation to write this article is to help guide new real estate investors away from the glorified version of rehabbing that is plastered all over TV… and point you toward what I believe to be the best way to get started in real estate investing.
I may be a bit of a hypocrite… but I didn’t start with wholesaling. I actually started with buying income properties. But, with today’s markets… wholesaling real estate is the way to go to get your feet wet and make some serious cash in the process.
There is much more to real estate flipping and wholesaling real estate than the TV “reality shows” tell you. One of the best ways to learn the ropes is to learn from someone who does it everyday and makes a solid living doing it.
So, you have three options on how to learn the ropes of wholesaling and flipping real estate:
- Go to your local REI club and hook up with an experienced mentor
- Go out on your own and try to hack it yourself with no instruction (not advised)
- Invest in a quality, step by step multimedia course that walks you through A – Z on the exact blueprint that successful wholesalers and real estate flippers use.
Myself, I ended up going first with option #2 (ended in disaster), then with option #3 (gave me the confidence to go talk to a mentor and get going), then ended up teaming up with a mentor.
The real estate wholesaling and real estate flipping course that I think is by far better than any other out there is below. They always way over deliver and they are the only “gurus” out there that I can truly say are trustworthy and good people. I’ve bought a ton of courses, and the Wholesaling for Quick Cash (link below) is the only one I’d recommend.
Wholesaling Course I Have, and Recommendç
So, whatever you do to get started in real estate investing, just do it. Taking the wrong action is better than taking no action at all.
Good luck… and Cheers!
Hey, my name is Trevor and I'm the founder of The REI Brain and a real estate investor since the age of 21. Right now, my focus in real estate investing is multi-family income properties and I have plans on moving more into the commercial real estate investment world in 2008 and beyond. 
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