The goal of flipping real estate is to make short-term gains.
What does that mean?
Well, property flipping involves buying property, waiting for it to appreciate in value and then selling off at a profit. And this re-sale of the property usually happens within a 2 to 5 year period.
However, since property values often do not jump significantly within a short period of time, real estate flipping merchants attempt to circumvent the normal process of price growth through property improvements.
For example, renovating an old house (along with re-designing its premises) and then giving it a fresh touch of beautiful paint can increase the perceptive value of the house. And, hence, real estate buyers may be willing to pay more for it.
Flipping real estate is essentially about doing whatever it takes to increase the perceptive value of a property so the seller can sell it for much higher than he bought it.
The selling price less the initial purchase price and the renovation and marketing costs then become his profit.
This implies that the real estate flipping merchant is actually a trader who is buying and selling real estate for short-term profit.
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Property flipping merchants make a sizable amount of money when things happen exactly as planned.
Their plan often is to buy a cheap property, renovate it and then sell for profit.
Some other flipping realtors choose to buy cheap, do minimal renovation, get tenants to occupy the house (to remove any doubts that the house has problems), and then to re-sell using the cash flow from the property as a selling point to potential buyers.
However you look at it, successfully flipping real estate happens when property prices are on the rise.
What happens when depression hits (or when real estate values start crashing)?
A depressed economy that leads to declining property prices often spells doom for property flipping merchants. And their predicament is made worse because most flippers use borrowed funds given by lenders who can be merciless.
There is a second disadvantage to real estate flipping.
The typical property flipper usually sell off the property they acquire with 2 to 5 years.
That time frame is too short to build significant wealth through real estate.
Yes, the flipping agent may earn 20 to 40 percent profit from the sale of the property when he finds a buyer willing to pay his price.
But that profit margin is relatively small compared to the true wealth a property can create for the owner when left to appreciate naturally in value over a 15 to 20 year period.
Proactive employees want to create long-term wealth . . . wealth they can enjoy even after retirement. Wealth that keeps on creating even more wealth long after they are retired.
The reason is pretty obvious.
Your employer will stop paying your monthly salary when you retire. And what you will be left with will be the real estate investments you created while you were still in paid employment.
That is why this premium retirement planning guide has emphasized again and again that proactive employees should make real estate investing a large part of their retirement planning strategy because real estate is an asset that keeps giving.
We recommend that you buy investment property and hold for 10 to 20 years so you can enjoy the maximum growth in value possible in the area where the property is located.
Yes, real estate investing can create massive long-term wealth for you . . . wealth that will allow you retire happy and financially independent.
Look beyond short-term gains when developing a retirement planning strategy.
Instead, think long-term.
Short-term gains earned from flipping real estate will long be spent by the time you're retired. The gains will not be available for you to spend by the time you're old and retired.
Yes, the future . . . when you're retired and out of job . . . is just as important as today.
Therefore, invest in real estate for the long haul.
Learn how to create even bigger wealth for yourself by learning how to transform debt to wealth through real estate.
That is the sure path to financial independence after retirement.
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