Keeping it Legal - What You Must Know Before You Flip a House
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Posted On :
Jul-30-2011
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Article Word Count :
521
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You have probably heard about house flipping on TV - of how a number people buy houses, fix them up and then resell them to gain huge profits all in a few month’s time.
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You have probably heard about house flipping on TV - of how a number people buy houses, fix them up and then resell them to gain huge profits all in a few month’s time. Whether you are interested in the house flipping business as an investor or if you want to get some extra cash, there are many things you might want to know first before you go on and start flipping homes.
When you flip a house, you are basically buying a home at a discounted price then reselling them quickly at a higher price for profit. This kind of practice sounds like a completely legal way of earning money, but is it really legal to flip a house?
In the United States, there is what is known as the Anti-flipping Law which applies to homes owned or bought through the Federal Housing Authority. This set of regulations does not render house flipping as illegal, but sets forth regulations to ensure that real estate investors charge justifiable sales prices and do not resort to any loan fraud. In other words, as long as you don't do anything illegal along the way, you can flip homes for extra income. When done properly, an investor can flip houses to earn a living: a completely moral, ethical and legal way to do so.
Most investors see flipping as an ideal business because returns are high and fast. How much can you earn when you flip one house? There is no exact estimate as to the potential for earning. Depending on the initial purchase price and investment and the market conditions, an investor can expect at least $10,000 to as much as $30,000 worth of profits per house at lightning speed rates.
Although many investors indeed have earned huge amounts of profits by flipping houses, it is important to note that this practice is not as simple as they tell it on TV. It is a risky business where well-thought of strategies and a lot of research work are important. You will need to do some detective work to find excellent deals for properties. And when you find one, you have to buy it fast. This goes without saying that you need to have enough standby funds to be able to buy a home as soon as possible. In fact, this is crucial especially if you wish to take advantage of sellers in need of urgent money. They would be willing to sell off their property at bigger discounts if transactions are faster.
Expert house flippers will usually advice newbies to buy properties that sells for at least 30% below market value. Everyone in the real estate market knows that this kind of property can be a little difficult to find these days. However, through persistence, you may be able to find good deals which will earn you good profit. But some leads will lead to a successful transaction, while many others would not. The key to this business is hard work, and luckily, this is the kind of hard work that pays off in the end.
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Article Source :
http://www.articleseen.com/Article_Keeping it Legal - What You Must Know Before You Flip a House_70038.aspx
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Author Resource :
The author of this article has expertise in Austin real estate. The articles about Lakeway homes for sale reveals the author’s knowledge on the same. The author has published many articles in his Austin real estate blog as well.
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Keywords :
Austin real estate, Lakeway homes for sale,
Category :
Finance
:
Real Estate
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