If you're like me, you love those Flip It television shows. They're addictive, aren't they??
And, unless you've been living under a rock, you've seen the media coverage about the record number of foreclosures in the United States.
These shows, coupled with the increased foreclosure rate in this country, have prompted many new investors to enter the market. In the Raleigh area, and in North Carolina in general, the foreclosure rates are almost certain to climb.
Each week, I receive quite a few emails and phone calls from new investors, looking for hugely discounted deals.
Flipping is a great way to make a significant amount of money in a short amount of time. However, I believe that buying and holding real estate long-term is also a great way to build wealth.
As with any investment, the key is to buy right. When I purchased my flip, I used a method called the Short Sale. The owner was headed towards foreclosure, and I worked directly with the bank to purchase the home for $33,000 less than was owed on the mortgage.
For the purchase, some investors have been known to take two (2) mortgages (80% first, and 20% second), and thus don't have to put any of their own money into the deal. However, given the current status of the mortgage market, banks may be hesitant to make these loans today. One should work closely with their mortgage professional to structure a deal that makes sense for a given situation.
Get yourself a Mentor. A good mentor can help guide you through what to do and how to do it. They can also share some of their mistakes so you can avoid making the same ones.
Another key is education--and LOTS of it! I've seen people get very anxious to "get rich in real estate", and then they make HUGE mistakes. There are a lot of crooks out there who take advantage of unsuspecting newbies.
Resources that have been a tremendous help to me and others that I know include:
Taking real estate investing classes at the community college. Two classes I took were: "Creative Real Estate Investing" and "Foreclosure and Bankruptcy" to learn the proper procedure for foreclosing on a property. If the bank doesn't foreclose on the property correctly, the new owner could potentially be in hot water. Be careful, Folks!
Joining a local REIA (Real Estate Investment Association group). In the Triangle area, we have the Triangle Real Estate Investment Association. To see a list of investment groups around the country, visit: www.nationalreia.com.In most areas, the cost is less than $300 to join, but the information gained is soooooo valuable!
Reading A LOT!
- One excellent book I purchased is: "The Weekend Millionaire's Secrets to Investing in Real Estate" by Mike Summey and Roger Dawson.
- Also, David Bach, the guy on Oprah's Debt Diet, has written several books, including, "Automatic Millionaire Homeowner."
- You should also check out the book, "The Millionaire Real Estate Investor" co-authored by Keller William Realty's Gary Keller; Dave Jenks, and Jay Papasan.
- FLIP: How to Find, Fix, and Sell Houses for Profit, by Ricki Villani and Clay Davis, with the forward written by Gary Keller.
- Investing in Tax Lien Certificates. A good book to start educating oneself is called, "Profit by Investing in Real Estate Tax Liens" by Larry B. Loftis, Esq.
Hope this helps. Stay tuned...I'll soon share with you some of the mistakes I made during my first flip, which was located in Cary, North Carolina...so you don't have to repeat them.
Happy investing!
Darleen McCullen, Realtor, Broker
Keller Williams Realty
Phone: 919.454.8864
Email: darleen@darleenmc.com
Copyright © 2007 - Darleen McCullen
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