Trying to Flip Houses with No Money Down? Good Luck.
Whenever I start hearing these radio commercials or see the so-called brand new investor on television proudly displaying his check for thousands of dollars in profits, I know it won’t be long before we start receiving calls and emails from “wanna be” investors.
The question we get… Do you have experience settling “flipped” or as they now call them “wholesale” properties?
My response… Yes, do you?
I’m not trying to tell you that all of the investors who are willing to teach you the finer points of real estate investing are scam artists, but the reality is that they’re usually the only ones getting rich and it’s off of the money that you’re paying them to supposedly teach you the business.
When you enter into an agreement to buy real estate for the purpose of flipping it, here are your options:
- Buy the property, fix it up and resell it.
- Assign your right to buy the property to a third party, usually for a fee. If you assign your interest to a third party, you must notify the seller that you’ve done so and most reputable investors will tell the seller the amount of the fee they’re receiving from the person or entity that they’ve assigned it to. This courtesy helps avoid problems down the road.
Remember, ignorance may be bliss, but if someone is suggesting that you go out and find a settlement company that will offer a “creative” way for you to transfer title without paying transfer fees you might be fracturing a law or two. If you’re caught participating in an illegal transaction, you could be looking at tens of thousands of dollars in fines and possibly a little time in the slammer.
Before pulling out the credit card to order the course that’s going to make you rich beyond your wildest dreams, do a little homework. Read the online third party reviews for the program that you’re considering. In addition, speak with a local settlement company, real estate attorney, lender or real estate agent to get some perspective from professionals who are involved in these types of transactions on a daily basis.
Investing in real estate can be very lucrative and has created the overwhelming majority of wealth in our country’s history, but even the shrewdest of investors started out with some cash. I’m not going to tell you that no money down investor transactions never occur, but if there’s anyone making millions doing it they’re most likely not sharing their secrets with you.