How To Flip For Profits by Jamel Gibbs

March 17, 2009

A good friend of mine wrote this article and I thought you should see it. Check it out…

The Easiest Way to Make Money in Real Estate Investing

By: Jamel Gibbs

Have you been trying to invest in real estate, but don’t know which way to go? Flipping houses is by far the easiest and simplest way to make money in real estate investing especially in today’s market. Many people have gone from rags to riches in a reasonably short period of time by getting involved in flipping houses. The reason for this is because house flipping provides large sums of money within a very short time frame if you know what you’re doing. The key is to be educated on how to do it then take massive action. The rest is history!

So how can you get involved in flipping houses and how can you make the kind of money that others are making in the real estate business? In this article we will discuss some easy to follow, basic strategies on what is needed to profit as a real estate investor. If you apply the information in this article then you will increase your chances on making money in the real estate business.

Making money in real estate investing all balls down to one thing, and that’s working with motivated sellers! If you don’t know how to target motivated sellers, then you will never make money in this business. I’m just being honest! But what is a motivated seller? A motivated seller can be anyone who is in distress financially, or physically. An example of a motivated seller is someone who is getting a divorce, going into foreclosure, paying 2 mortgages, need to rehab their property but don’t have the cash, going bankrupt, and so on. Therefore, in order to get a great deal when flipping houses you have to find someone that falls within this category. You can find these sellers using various forms of advertising.

Some forms of advertising can be bandit signs, newspaper ads, cold calling, billboards, etc. The idea is to always be in the seller’s face. Everywhere they look they should see your advertising. Aggressive advertising breeds aggressive results.

When the calls are starting to flood in from the different advertising methods the next thing you have to do is get the right information from the seller. You can do this by asking the seller for information on their property. You want to find out what type of condition the house is in as well as the asking price of the property, but the most important question you need to know is why the seller is determined to get rid of their property.

Once you have all of the information that you need from the motivated seller, the next thing you need to do is run comparable sales to see if the deal will be a good house flip. You can do this by going to sites like realquest.com, Eppraisal.com, bank of America has a home value estimator and you can find it by going to Google.com and punching in Bank of America Home Value Estimator. You can also use sites like Investorcomps.com, or consult with a realtor. There are many ways to run comparable sales when you’re looking to find out what a house is truly worth.

After you get the comps for the house the next thing you need to do in order to flip a house is work the numbers. You can do this buy understanding the MAO formula. The MAO formula is as follows: You take the ARV (After repair value) and you times it by 70% and that leaves you with the amount that you’re willing to pay for the house. Then you subtract the rehab cost, closing cost and overhead and that leaves you with the MAO or (Maximum Allowable Offer) that you can make on the house.

Once you have the Maximum Allowable Offer the next thing you do is make the offer. Your offer should be less than what your maximum allowable offer is. The best thing to do in this case is to subtract and additional 10% off of the MAO and start you’re bidding with the motivated seller from there. Negotiations can make or break your deal when it comes to flipping houses so make sure that you’re sincere and very clear with the seller from the very beginning.

After it’s all set and done, you need to find a buyer in order to flip this house. You can do this by running newspaper ads, building a buyer’s list, auctioning the property, selling below market value for a quick sale, rehabbing the property and then selling it, and many other ways. The best strategy to use if you ask me would be to sell the property less than the market value without rehabbing it. This is called wholesaling the property.

If you want more quality information on house flipping simply go to www.HowtoFlipforProfits.com . There you will find out how to take advantage of the current real estate housing crisis and make boat loads of money in real estate investing.

Jamel Gibbs own one of the fastest growing real estate investment businesses in Pennsylvania. He’s originally from Brooklyn New York. He became a real estate agent at the age of 21 years old and a broker shortly after. Jamel started buying real estate when he moved to Pa and he now has a successful real estate investment business. He also coaches others who are interest in making massive profits in real estate. Check him out at www.HowtoFlipforProfits.com