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Is flipping houses purely a dangerous way of gambling on the housing market? Should it really all be about cash flow?
Sadly it seems that some still just don?t get flipping houses or at least they haven?t been successful at it or make more money from acquiring rental properties. Though one blogger who recently claimed ?flipping houses is not real estate investing? and that it relies on speculation was certainly irresponsible, misleading or at least terribly misinformed. A prime example of why constantly building on your real estate education is so critical.
Flipping houses the right way is certainly anything but speculative. In fact there is really no safer way to get into real estate investing. Buying homes at full market price and sitting on them, hoping to unload them for a profit sometime in the future, now that is an incredibly dangerous and speculative approach to real estate investing, especially if any leverage is used. That is exactly what brought the housing market to its knees.
In contrast, buying low and locking in your profits at acquisition is not just smart but the only way you should approach any type of investment. If you buy low enough you don?t even have to get into rehabbing and you certainly don?t have to wait months on end to get full price from a retail buyer. Right now the focus of the game should be buy low, sell low, flip more houses. If you can get top dollar great. If not make a nice spread and get onto the next one.
Going a step further, those who really take their real estate education seriously will learn how to build a serious buyers list and network. This eliminates months of marketing compared to what some outdated real estate courses may teach but it only makes sense. This way you already have buyers lined up before you make acquisitions, you know how much they can pay and that they can pay. Meaning barring any issues which you should have a back up plan for anyway your acquisitions are almost as good as gold when you put pen to paper.
Source: http://www.fortunebuilders.com/2012/02/02/flipping-houses-is-not-real-estate-investing/
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