Flipping houses (also known as wholesaling houses) is the quickest method to make cash in real estate investing. It is also the business model that needs little to no money invested.

 You can make your money in just two to three weeks.  The profits may not be as big as other real estate investing business models, but you can generate a healthy income just by wholesaling houses.  On average, I take home $5000 to $10000 per deal, with very little effort and work.   You can do 3 to 5 wholesale deals a month part time.

 Mainly you must identify good deals below market value and a real estate investor with cash.

 I do not rehab anything when wholesaling houses; this is the work of the real estate investor that I flip the deal to.

 To be successful as a real estate investor flipping houses, here are a few tips you must follow.

1) Buy at a price range comfortable to you
Most rehab real estate deals fall in the middle price range.  Where I live, this is generally below $150,000.  Some lenders only lend if you buy with defined price ranges.  By going too low, you could be targeting unattractive neighborhoods.  Going too high can limit the number of buyers you have. It is necessary to have high speed for successful wholesale real estate investing.

2) Avoid wrong neighborhoods
 Fairlypriced neighborhoods are most popular with most real estate investors.  Notwithstanding the fact that lower prices are always better, most real estate investors would rather buy where they can rent them out easily. Wholesale real estate investing therefore requires you target good neighborhoods.

3) Estimate market value and rehab costs quickly and accurately
Repair estimate is a must when wholesaling houses.  Most are need of fixing up, so repair estimates must be included in the offer you make.  When buying wholesale houses, I buy below 65% of fair market value minus rehab costs. The lower my offer, the more my potential profits when I flip to other real estate investors.

4) Make good offers and buy right
 The most important part of real estate investing is making an offer. When flipping houses, you must make a profit and still leave a profit for the real estate investor buyer.

Obviously, as long as you know the estimated restoration costs and the after repair value after it is fixed up, you will be able to make an offer that both gets accepted and leaves enough cash on the table for both you and the wholesale real estate investor you flip the house to.

5)  Get real estate investors who buy wholesale deals with cash
 Once you have a contract to buy, you must get a wholesale buyer with cash who will fix it and sell, or hold it.  You must verify where the money is coming from before flipping your houses.  Money in the bank or credit line is always the best source of cash.  This way, you will sell your houses fast with few lending conditions.

 Most importantly, they must produce a sizable nonrefundable earnest money before I can sign a contract.

6) Sell quickly
 Once you have verified cash, you can close your deals with 2 to 3 weeks including time for title work.  The faster to can sell, the faster you make your money and move on to other deals.

ABOUT THE AUTHOR
 Simon Macharia is a real estate investor in Dallas, Texas, mainly flipping houses. As part of successful real estate investing, he runs his business from a real estate investor Web Site from http://www.Realestateinvestorswebsites.Net

Flipping houses usually refers to buying and selling houses. It really means wholesaling houses even though most people take it to mean buying, fixing and selling houses. Wholesaling houses involves buying houses below  market value, rehabbing them if they need repairs, then selling them for a profit.

This is the definition we will stick to in this article.

Wholesaling houses is the quickest method to create cash in real estate investing. It also needs the least amount of cash invested in the deal. Occasionally you can wholesale houses without using your own cash.

So how do you do it?

1) Identify cheap houses
The best source of cheap houses is motivated sellers. I target people with legal issues and who own real estate. These are people with inherited property, bad tenants, liens on their properties, divorcing and so on.

The easiest way is to send them letters or post cards. In my business, they get 2 post cards 30 days apart. Each letter or post card prominently displays my real estate investing website URL as the main call to action. My phone number is less obvious. This way, I drive them to my real estate investor website which pre-sells for me.

Chances are the transactions I get are fully pre-screened and pre-negotiated so I need just a few minutes to tell whether it is a deal or not - then make an offer or move on.

Some people wholesale properties that have been foreclosed, but this is not the subject of this article.

2) Sign a contract to buy
As soon as you have identified a good deal whose figures look desirable, you must put it into contract. In each state, there are contracts regularly used by real estate agents, or you can get contracts that can be used countrywide. I prefer to use contracts mandated by our state real estate commission because they are more popular and most people, including title companies and sellers are more comfortable with them.

3) Begin title work.
The first thing I do is fax my contracts to my title company for title work to begin. You must ensure you buy and sell the house free of any liens. Title companies do this work.  As an investor, you do not need to get too concerned about the technicalities involved. I prefer to let professionals do their work.

4) Identify buyer with cash
Buyers with real cash in the bank are preferable. With cash transactions, you have few limitations in the transaction. Most real estate investors buying houses may have sold a house or have a line of credit for cash purchases.

Alternatively they have private money investors or get cash from hard money lenders.

Avoid buyers looking for traditional financing. Most loan companies will not lend on houses that need restoration and you could have seasoning issues, meaning you must hold the property for 6 months to 1 year before you can sell it.

5) Sign a contract to sell
The type of contract you sign depends on the amount of money in the deal. First, you must leave enough money in the deal for the real estate investor buyer. After all they will do rehab work.

I prefer to do a contract assignment if my potential profit is less than $10,000.

In contract assignment, you simply assign your contract to your real estate investor buyer. You assign the contract; you do not sell or assign the house. This is perfectly legal all over the country and you do not need a license for it. This contract is usually as little as 2 to 3 paragraphs.

In this case, the real estate investor buyer you wholesale the deal to closes the transaction, not you. You collect an assignment fee once the deal is closed.

If  I am making more than $10,00 or my profits are near or the same as the real estate investor I sell to, then I prefer to do a simultaneous closing, also called double closing. This involves buying the house from my motivated seller, then selling it to my real estate investor buyer.

In a double closing, you buy and sell on the same table, so it involves 2 transactions. In this case, you own the property for a few minutes before you sell it. Of course, you have to incur closing costs that you do not incur in contract assignment.

He  contract for simultaneous closing id just like the one to buy with a higher selling price and more favorable terms for you.

Whichever contract you sign, make sure to collect earnest money. I always make sure the earnest money is non-refundable if they do not buy the house. You must make sure the contract expires before your contract to buy and the property reverts back to you.

6) Collect your cash
You must make ensure follow the transaction process until the deal is closed. You collect your check from the title company when the  transaction is completed. It is therefore in your best interest to make sure you close any loose ends and make sure the deal does not fall between your fingers.

How much cash is needed to flip houses?
When you sign your contract with the buyer, you may have to put up earnest money, usually between $100 to $500. There is no contract without earnest money. When I sign the contract to sell, I collect an earnest money check which is deposited with the title company.

In simultaneous closing, you can use the cash from your investor buyer to close the first transaction so you may not need to use your own money. If your buyer source of funds does not allow you to use his money to close the first transaction, then you might need to get transactional funding to a few points to close the first transaction before you can sell.

When all is said and done, the checks you collect from flipping houses will be easy and fast. You can close a few such transactions a month.

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