Reiwired: Famous Fallacies About Flipping Houses
For every business, theres always a set of fallacies surrounding it. In the case of flipping houses, there are many false beliefs that have discouraged prospective investors. However, those who dig deeper learned that all those truths were actually lies that originated from misinformation. Here are some famous fallacies about flipping houses.
1. Only rich people can venture in this business. A lot of people think that flipping houses, which is also known as wholesaling houses, requires a ridiculously huge starting capital. After all, you deal with houses, right? Wrong. You dont exactly buy and sell properties; you merely sell contracts to buy these properties. This business is placing a property under contract to buy it. And then, you will look for a buyer who will purchase it using the contract you made the owner sign. In the process, you take home an assignment fee. The only capital you will need is enough money to convince the owner of the property to place his house under contract. Some owners agree to wholesalers terms for as little as $10. Its because they feel that you are helping them sell the property, which you are actually doing.
2. Flipping houses is illegal. This fallacy surfaced a few years back because this business was misconstrued to be mortgage fraud. It earned a negative image because of that. However, there is actually nothing illegal about. Placing properties a house, a car, or any property for the matter under contract is a legitimate business. Raising the price of property by bribing assessors, however, is illicit and should not be practiced by wholesalers.
3. Wholesaling houses is facing stiff competition from rehabbing. This is a huge fallacy. Flipping houses is actually booming largely because of the success of rehabbing. Where do you think rehabbers buy the houses they repair and eventually sell for a profit? Yes, they buy them through the help of wholesalers. Rehabbers, like investors and homebuyers, are clients of wholesalers.
Now that the business of repairing and selling properties is booming, you can expect investors to be searching for more properties. You can profit from this opportunity if you start flipping houses today.
Before you give up on something, make sure you dig deeper about it. Know what the truths and fallacies about that business are and then make an educated decision whether you will proceed with it or give it a miss. Go to REIWired.com to learn more about this industry.
by: Daniel Mc Grey