Flipping Houses For Profit – Easy Home Based Real Estate Business

Simply put, the process of flipping houses can be described at purchasing a property and reselling it for a profit. The house flipper (potentially you) tries to complete the entire house flipping process within the shortest time interval, thus making quite a hefty profit.

Attaining success in the house flipping game requires the potential investor to think like a real estate power investor and capitalize on the available opportunity by executing a series of well timed decisions to the best of one’s ability and access to resources.

If you’re planning to resell houses (better known as ‘house flipping’), you need to have a solid framework of the strategies and techniques that can be put into practice, in addition to the technical know-how in areas such as tax planning.

Once you have a strong educational framework ready, you need to start planning on achieving success.

Your Planning activity should include:

  • Setting your short (daily, weekly, monthly), medium (quarterly, half yearly, yearly) and long term goals (more than one year).
  • Determining exactly what tasks you would like to achieve in a given period.
  • The strategies you’ll be implementing in executing your plan.

You’ll be performing these strategies everyday, thus as you probably know by now – real estate investing is locating properties that can be sold with comparative ease, negotiating the details of the process and then choosing the best path of action that should be implemented by you for archiving the maximum profit.

If your lucky, it’ll be a quick flip after a minor (or major) property rehab, while at other intervals you’ll just be required to buy and hold your house so that it can be sold at a higher price at a future price, while sometimes its a little bit of both. Thus, the key to real estate investment success lies in determining what the market wants in order to make the maximum profit.

If your getting started now, and are scared about making mistakes, thus will cause a sense of dread within you, that will prevent you from reaching the peak of success. Don’t allow this dread to set in, instead take the assistance of an experienced real estate investor, who has gone down a similar road as you, for being your mentor of sorts, who has the ability to gently guide you by the hand until you reach the winner’s circle with up to date advice, encouragement and valuable words of wisdom.

Real estate investing is an art and one needs to know exactly what strategies to use no matter what situation the market is in (it hasn’t been hotter in the past 30 years than it is in 2009), and you will need all the tools of the real estate investing trade, such as the acclaimed patented real estate home analyzer robot software to quickly determine the value of a property and identifying the relevant comps, thus arming you with the correct information as part of your property research. Best of all, it automatically pulls the values and comps from three of my favorite websites. Then it prints a PDF report that you can save and utilize it while comparing different properties, so as to make the most economical offer.

Real estate investing does take commitment and stamina. You too can start today, by taking these simple lessons to heart and allowing the touch of a master’s hand to transform your dreams into a reality.

Written by Charrissa Cawley (fondly called “Cher” by her buddies), founder of the Real Estate Power Investor home learning e-course – the complete learning resource that goes into the depths of real estate investments as per the current market scenario.

She’s a multimillionaire real estate investment guru, who just until half a decade ago used to be a 31 year old stay at home mom. She has aced the world of real estate investing, making US$2.14 million dollars in her first year as a real estate investor as net profit. She has long standing reputation for excellence as a real estate trainer, gifted speaker and wealth building coach. Her strengths include training entrepreneurs of all experience levels in all areas of real estate investing and financial literacy.

If you would like to plug into her network of valuable real estate investing and flipping information,

 head over to her website:

Real Estate Power Investor  to judge for yourself regarding the profitability of the solutions and proofs offered by her.

Her passion is bridging the gap between learning and doing. Having been down the difficult road of mastering the art of knowing a great buy from a good one, she spent years learning, fine tuning, and practically applying her knowledge. She helps thousands of entrepreneurs all over the world seeking financial growth by equipping them with specialized tools, resources and specialized knowledge to succeed. Unlike others, Charrissa only offers strategies that she has herself tested to be proven and accurate to real estate investors and wanna be real estate investors.

Seller Financing Gets Deals Done In Good Times And Bad Times

Yes, times are tough and everyone knows that conventional small business loans are exceedingly difficult to obtain. Moreover, small business loans will continue to be difficult to obtain for the foreseeable future. In reality, this isn’t anything new or specific to the state of the current economy. The fact is that conventional business loans have always been hard to get. Since the beginning of time (well almost), conventional lenders only made loans to the most bankable small businesses. In other words, conventional lenders always have and always will limit their small business loans to:

  1. businesses with several years of verifiable, positive cash flow
  2. businesses with a lot of collateral, and
  3. businesses with strong management.

Today, conventional lenders have a hard time working with even the best qualified small businesses. So – what’s a buyer/seller/broker to do? Rely heavily on seller financing.

I know, seller financing has always been around as an optional piece of the deal making puzzle. Seller financing isn’t optional anymore. Buyers, sellers and brokers should either use seller financing right now or they should plan to do zero deals until the credit situation settles down. In other words, plan to stay out of the game for two, three or four years.

SELLER FINANCING HELPS EVERYONE

Simply stated – seller financing can get deals done. This is true for a lot of reasons. For instance, nobody has to go through the massive paperwork production required by conventional lenders. Of course, sellers and buyers need to perform some due diligence on one another. However, a seller financed loan is no where near as demanding as is a conventionally financed loan. So the deal gets done, the buyer gets financing and the seller gets cash flow from the loan.

HOW SELLER FINANCING WORKS

Sellers ordinarily do not want to hold on to a loan for a long time. This means that the seller financed loan should be designed with the goal of having the buyer refinance the loan with another lender (for purposes of this article, a conventional lender) two or three years after the seller financed loan is originated.

Before I get into refinancing, you still need to consider the basics of a seller financed loan. A typical seller financed loan involves the loan being paid pursuant to the terms of a confessed judgment promissory note backed by a security agreement. Confessed judgment simply means that if the buyer defaults on the note, then seller can promptly obtain a judgment in court without resorting to formal litigation. The security agreement is just a written agreement which lists the loan’s collateral. The collateral is usually the business as well as any other assets of the buyer such as the buyer’s house. The security agreement is then made a public record so that the world is put on notice that the seller has some rights in the collateral if the buyer tries to do something with the collateral during the life of the loan.

The exact terms of the note will change from deal to deal. However, it is safe to assume that the note should have realistic payments based on the business’ revenue history. Even though a seller usually has no intention of holding a loan for a long time, the loan has to be structured such that it has at least a ten year repayment schedule with a balloon payment required some time earlier, such as three years. In other words, the notes are usually amortized over a long period of time but are due in a relatively short time. For example, a $200,000.00 note amortized over ten years at nine percent interest with a balloon payment in three years results in $2,533.52 monthly payments of principal and interest. Then on the note’s third anniversary a balloon payment of $139,072.08 is due. In a nutshell, the buyer has thirty six months to find another lender.

Once the terms of the loan are negotiated then the buyer signs the note and gives it to the seller. Meanwhile, the buyer must be doing everything in anticipation of refinancing the note.

ADVANTAGES AND DISADVANTAGES

Like everything else in life, seller financing has advantages and disadvantages for all parties.

Some pros for the buyer: 

  1. relatively easy to obtain credit
  2. repayment terms can get very creative
  3. seller is kept in the game and still has an interest in seeing the business thrive
  4. depending on the terms of the loan, buyer can withhold re-payment if there is something wrong with the business

Some cons for the buyer: 

  1. interest rates will probably be relatively high
  2. loans tend to be short term with an emphasis on refinancing as soon as possible
  3. seller might be constantly looking over your shoulder

Some pros for the seller: 

  1. recurring monthly revenue for as long as seller holds the note
  2. will most likely obtain interest at a higher rate than anything else in your portfolio
  3. if the buyer defaults, seller can take the business back
  4. taxes can be spread out over the life of the note (don’t take my word for it, please consult your accountant for expert tax advice)

Some cons for the seller: 

  1. seller is still closely connected to the businesses
  2. buyer could default
  3. seller has to wait to get all of the money

CLOSING

Small business finance is challenging in good economies and bad economies. OK, so things are a little difficult right now. People still want to buy and sell small businesses. Banks and other conventional lenders flatly do not have the ability to finance many small business deals these days. A good way to get around this is to do some significant seller financing, or else you will probably have to stay on the sidelines until who knows when.